Ignore Court Orders at Your Peril

Frivolous Litigation and Frivolous Appeal Causes Default to Be Entered

Barry Zalma

Feb 28, 2024

Transcript

PROOF OF FRAUDULENT CLAIM REQUIRED SUIT

Transamerica Life Insurance Company (“Transamerica”) sued Akop Arutyunyan and his daughter Anahit Arutyunyan for allegedly engaging in a conspiracy to defraud Transamerica into paying benefits under a long-term care insurance policy.

In Transamerica Life Insurance Company v. Akop Arutyunyan; Anahit Arutyunyan, No. 22-55199, United States Court of Appeals, Ninth Circuit (February 22, 2024) Transamerica sued to avoid paying benefits to a fraudulent disability claim.

FACTS

In March 2016, Transamerica issued a life insurance policy to Anahit, which covered her father, Akop, as the “Insured.” The policy included a “Comprehensive Long Term Care Insurance Rider,” that generally agreed to “pay a Monthly Long Term Care Benefit when the Insured has incurred expenses for Qualified Long Term Care Services.”

Akop filed a claim for benefits under the rider. Transamerica, unsure about the claim, conducted surveillance of Akop and an inconclusive IME and paid while conducting further surveillance showed that Akop was continuing to engage in activities that were inconsistent with his claimed level of impairment.

ABUSE OF TRIAL COURT ORDERS

Concluding that Defendants had repeatedly failed to obey court orders, the Ninth Circuit found it was abundantly clear appellants arguments were wholly without merit.

The multiple misstatements by counsel requred an order to show cause that may ultimately call for the application of “Hanlon’s Razor”: “Never attribute to malice that which is adequately explained by stupidity.”

The Ninth Circuit found a default judgment as a sanction was appropriate and that the appeal was frivolous.

ZALMA OPINION

Transamerica was the victim of a blatant fraud. Surveillance established that the disability claimed by the defendant did not exist and so Transamerica sued to end the payment of benefits to the defendants only to be met with recalcitrant defendants and defense lawyer who refused to obey any court order, lied to the trial court and to the Ninth Circuit and may find criminal charges pending and a law license in jeopardy. The actions of Transamerica actions should be emulated by every insurer faced with a fraudulent claim and the California Bar should take action against the lawyer if he cannot show good cause for his actions and the US Attorney should consider the criminal conduct.