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Elaborate Jewelry Heist Results in No Coverage for Jewelry Store’s Loss Under Dishonest Entrustment Exclusion

The Appellate Division of the Supreme Court of New York has provided some clarity to New York businesses and their insurers dealing with loss resulting from fraudulent entrustment. In Crown Jewels Estate Jewelry, Inc. v. Underwriters At Interest At Lloyd’s London, Case No. 2020-04312 (N.Y. App. Div. May 13, 2021), the court held that coverage under a dishonest entrustment exclusion was properly denied where an individual fraudulently convinced a high end jewelry store to let him borrow five pieces of jewelry. In a Scorsese-like plot, Paul Castellana, the plaintiff, emailed Crown Jewels Estate Jewelry, a high-end jeweler, saying he worked for Sony Pictures International and asked to borrow jewelry for a video he said he was shooting with Jennifer Lopez. After

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Posted in Exclusions, Fraud

Policyholders’ Counsel Test “Mother of All” Covid-19 Coverage Suits in a Bid to Block Insurers’ Path to Federal Court

Covid-19 has caused trillions in business losses. Whether those losses are covered by commercial property insurance is an existential issue for both policyholders and insurers. But before that legal battle, the battlefield must be chosen. Do these coverage suits belong in federal or state court? In July 2020, a group of 42 Chicago restaurants and bars filed a lawsuit in Illinois state court against 19 commercial property insurers, seeking coverage for Covid-19 business losses,[1] in what plaintiffs’ counsel called the “mother of all” Covid-19 coverage suits.[2] A few days later, the same counsel filed a suit in New York state court on behalf of 94 restaurants and bars against 41 insurers.[3] Both suits allege that the insurers wrongly denied coverage,

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Posted in Coverage, Fraud

An Injured Third Party’s Knowingly False Deposition Testimony Establishes the Materialty Component for Insurance Fraud

On May 13, 2006, Edward Feierstein was driving home from his Philadelphia fitness club when his car was rear-ended. Two days later, Feierstein filed a claim with the tortfeasor’s liability insurer seeking reimbursement for his alleged bodily injuries.  Two years later he filed suit against the company’s insured.  The liability insurer, in its defense of the suit, hired a private investigator. Surveillance video footage was secured of Feierstein working out at a fitness center, and his club, while stretching, exercising on an elliptical machine, a weight-lifting machine, and playing tennis. At his deposition, Feierstein was unware of the video surveillance.  He testified that he had not played tennis at all since the accident, nor worked out in any gyms since

Posted in Fraud

New Jersey Supreme Court Holds that a Person Violates the Insurance Fraud Statute Even if Insurer is Not Duped Into Paying a Fraudulent Claim

In the recent case of State of New Jersey v. Robert Goodwin, 224 N.J. 102, 129 A.3d 316 (N.J. 2016), the Supreme Court of New Jersey held that a person violates the insurance fraud statute, N.J.S.A. 2C:21-4.6(a), even if he or she does not succeed in duping an insurance carrier into paying a fraudulent claim. In doing so, the Supreme Court reinstated Robert Goodwin’s conviction for insurance fraud. At trial, it was established that Goodwin and “Stacey” were involved in a romantic relationship since 2004 and living together in Newark, New Jersey. In April 2009, Stacey purchased an SUV for over $6,000, financed by Goodwin co-signing the loan. Insurance was procured from Progressive Insurance Company. Goodwin was the primary operator

Posted in Fraud
About The Property Insurance Law Observer
For more than four decades, Cozen O’Connor has represented all types of property insurers in jurisdictions throughout the United States, and it is dedicated to keeping its clients abreast of developments that impact the insurance industry. The Property Insurance Law Observer will survey court decisions, enacted or proposed legislation, and regulatory activities from all 50 states. We will also include commentary on current issues and developing trends of interest to first-party insurers.
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