Callahan & Fusco Secures Victory in Complex Negligence Battle

Callahan & Fusco scored a substantial victory on behalf of our clients in Westchester County on a complex choice-of-law motion in a high-stakes personal injury action.  In Long v. SFJ Trucking, Inc. et. al. plaintiff, a New York resident, sustained serious injuries resulting in the amputation of his left leg when he was involved in a motorcycle vehicle accident in Ridgefield, Connecticut. Defendants were domiciled in Connecticut. Contributory negligence was a significant factor as Plaintiff was speeding and crossed the double-yellow line prior to the collision.  Plaintiff brought suit in New York to take advantage of New York’s pure comparative negligence law, which allows plaintiffs to recover damages even if they are more than fifty percent liable for the accident. In contrast, Connecticut has a limiting loss allocation law prohibiting plaintiffs from recovering damages if they are more than fifty percent liable for the accident at issue. 

Defendants brought a motion for the court to take judicial  notice of Connecticut’s limiting loss allocation statute arguing that as Connecticut domiciliaries they were entitled to the protection of Connecticut law.

Defendants relied on the seminal case of Neumeier v. Kuehner which set up a three-rule framework for resolving choice-of-law issues involving statutes that allocate losses after the tort occurs rather than regulate primary conduct. Under the Neumeier framework when a defendant’s conduct occurs in the state in which they are domiciled, and that state’s laws limits or precludes liability, then that state’s law applies. Plaintiff argued that as a New York resident he was entitled to the protection of New York’s pure comparative negligence law.Essentially, this Neumeier Rule adopts a “place of injury” test when two state laws conflict with each favoring their respective domiciliaries.

Ultimately, the Court held that Connecticut’s limiting loss allocation law applied to this action because defendants were domiciled in Connecticut and the accident occurred in Connecticut. Therefore, under the Neumeier framework defendants were entitled to the protection of Connecticut law.

RICO Lawsuit Unveils Alleged Fraudulent Solicitation Practices

In a significant legal development, Kelly Cook and Esther Kelley-Cook have initiated a class action RICO lawsuit against Progressive Casualty Insurance Company and The Law Offices of Kanner & Pintaluga, P.A. (“K&P”), a Florida-based law firm, in the Southern District of Texas (Case No. 4:24-cv-4423). The plaintiffs allege that the defendants engaged in unethical practices by sharing the personal information of crash victims for solicitation purposes, raising serious questions about ethical standards in the legal and insurance sectors.

The complaint outlines a troubling incident where the plaintiffs were contacted shortly after experiencing a no-injury collision, which resulted in minor property damage. They received unsolicited calls from a "case runner," an individual employed by K&P to recruit clients using personal information obtained from Progressive. During these calls, the plaintiffs were offered legal representation and assured a minimum recovery of $10,000 for retaining the law firm. K&P allegedly informed the plaintiffs that their contact information had been shared by Progressive through an existing agreement between the insurance provider and the law firm.

The plaintiffs are asserting claims under RICO violations, Texas’s Deceptive Trade Practices Act, and the Driver’s Privacy Protection Act, highlighting the defendants' actions as illegal, unethical, and fraudulent.

As the case progresses, new revelations have surfaced regarding the extent of the alleged fraudulent solicitation tactics employed by K&P. A whistleblower letter suggests that K&P may be involved in a case running scheme orchestrated by Accident Solutions, a Florida for-profit corporation. This entity is accused of impersonating various law firms, including K&P, and utilizing pre-signed blank retainer packets to solicit clients directly. Many of these clients are immigrants who are misled into believing that they are communicating with or receiving calls from Progressive.

The whistleblower's letter further claims that employees of Accident Solutions inform clients they are being assigned attorneys and promise monetary compensation or guaranteed results in exchange for their cooperation. It has come to light that K&P reportedly paid Accident Solutions over $100,000 per month for signed case packets, with each lead costing as much as $5,000—a practice that allegedly continues until late 2024.

The letter also indicates that K&P is not the only law firm benefiting from the practices of Accident Solutions, providing a list of other firms purportedly complicit in these fraudulent solicitation tactics.

This case underscores significant ethical concerns surrounding solicitation practices and the responsibilities of law firms and insurance companies in managing sensitive personal information. As developments unfold, Callahan & Fusco will closely monitor the lawsuit, given its potential implications for both the legal and insurance industries.

3 Women Arrested in Miami-Dade Insurance Fraud Crackdown Bond Out of Jail

Three women — Heidy Gonzalez-Perez (26), Elizabeth Montero (45), and Maray Arteaga (39) — were arrested on December 16, 2024, at the Wise Care Corp. Clinic in northwest Miami-Dade for allegedly running an elaborate insurance fraud scheme. The women, who held various roles at the clinic, faced charges including racketeering and grand theft. They appeared before a judge on December 17, 2024, and were granted bond amounts between $26,000 and $40,000.

According to Miami-Dade Police, the scheme involved recruiting individuals to participate in staged car accidents. These recruits would then be sent to the Wise Care Corp. Clinic to claim medical treatment they never actually received. Despite the lack of real care, the clinic submitted fraudulent insurance claims to collect payouts.

Detectives discovered numerous pre and postdated medical forms and blank insurance claims already signed by patients—many of whom had never stepped foot in the clinic. These documents were submitted to insurance companies as if legitimate treatment had occurred.

The investigation into the clinic began after two drivers, Cynthia Reyes and Yamil Peniche-Lugo, were arrested in July of 2024 for staging an accident in which they confessed to their involvement. Surprisingly, an insurance claim was filed three months later, prompting authorities to uncover a deeper operation at Wise Care Corp.

This case is part of a broader crackdown led by a new pilot program within the Miami-Dade Police Department aimed at combating rising insurance fraud. Since its launch in March of 2024, the initiative has led to 104 arrests. Lt. Lazaro Torres, who leads the effort, previously worked in the insurance industry and was motivated by his experience to tackle these crimes. He described a coordinated network of clinics, attorneys, and auto repair shops working together in these scams, which contribute to Florida’s high insurance rates.

Mark Friedlander of the Insurance Information Institute emphasized the broader impact, noting that Florida ranks among the top three states for insurance fraud, with approximately 1,100 staged accidents annually. He stated that such fraud costs Floridians hundreds of dollars more on their insurance premiums each year, with Miami consistently ranking as one of the top metro areas for staged accidents.

PA Jurisdiction Denied: Insurer's Certificate Not Enough

In the case of Abira Medical Laboratories, LLC v. Freedom Life Insurance Co., No. 2:24-CV-02110-JHS (E.D. Pa. Jan. 10, 2025 Slomsky, J.), the Eastern District Federal Court of Pennsylvania, addressed a question of first impression and held that a foreign insurance company who did not consent to general personal jurisdiction in Pennsylvania, simply based on the fact that the carrier obtained a Certificate of Authority issued pursuant to 40 Pa. C.S.A. § 46 in order to conduct business in Pennsylvania.

Defendant is a foreign insurance company that holds a Certificate of Authority issued by the Pennsylvania Department of Insurance, authorizing it to conduct insurance business in Pennsylvania. Plaintiff is a licensed medical testing laboratory that performs clinical laboratory, pharmacy, genetics, addiction rehabilitation, and COVID-19 testing services at its facilities located in Bucks County, Pennsylvania. Plaintiff provides these laboratory testing services to Defendant's insured members, among others, as an out-of-network provider.

When the Plaintiff had a billing dispute with the insurance company regarding services performed, the Plaintiff sued the Defendant in a Pennsylvania Court of Common Pleas. The Defendant carrier removed the action to federal court on the basis of diversity and then filed a Motion to Dismiss. The Defendant carrier asserted, in part, that the court lacked personal jurisdiction and specific jurisdiction over the insurance company.

The Plaintiff argued that the Defendant carrier had consented to general personal jurisdiction on any claim because the Defendant had applied for and received a Certificate of Authority to do insurance business in Pennsylvania pursuant to 40 Pa. C.S.A. § 46. Plaintiff relies on United States Supreme Court decisions Pennsylvania Fire Insurance Co. v. Gold Issue Mining & Milling Co., 243 U.S. 93 (1917) and Mallory v. Norfolk S. Railway Co., 600 U.S. 122 (2023). But because the Missouri statute at issue in Pennsylvania Fire and § 411, the Pennsylvania statute at issue in Mallory, differ from § 46 in one key aspect, namely the scope of jurisdiction provided for in each statute, Plaintiff's reliance on these cases to support its argument that Defendant consented to general personal jurisdiction in Pennsylvania is misplaced. Unlike the defendants in Pennsylvania Fire and Mallory that agreed to be subject to suit in Missouri and Pennsylvania on any claim, Defendant has only consented to suit in Pennsylvania on claims arising out of a violation of § 46 brought by or on behalf of the Insurance Commissioner.

The court noted that, under the plain language of § 46 foreign insurance companies wishing to conduct business in Pennsylvania must obtain a Certificate of Authority from Pennsylvania’s Department of Insurance. The statute further provides that, upon obtaining a Certificate of Authority, § 46 allows for any action arising out of a violation of § 46 that is instituted by or on behalf of the insurance commissioner to be brought against the foreign insurance company in Pennsylvania.

Here, given that the current action was not commenced by the insurance commissioner arising out of a violation of § 46, but rather was an action brought by a private party, the grant of jurisdiction provided under § 46 over a foreign insurance company was not implicated.

The court also held that the Defendant insurance company had not otherwise consented to personal jurisdiction in Pennsylvania. Defendant is not registered to do business in Pennsylvania under § 411. As such, Defendant has only appointed an agent in Pennsylvania, who is "the Secretary of the Commonwealth and his successor or successors in office," to accept service of process for the limited types of claims permitted to be brought against it by § 46.

Given that the Court found that it lacked general personal jurisdiction, as well as specific personal jurisdiction over the Defendant insurance company, the Court granted the carrier’s Motion to Dismiss.

The High Price of Ambiguity

Recently, the Appeals Court of Massachusetts addressed the question of whether a nonstandard “follow-form” provision of a personal excess liability insurance policy which did not unambiguously incorporate exclusions from the underlying automobile policy entitled the insureds to coverage under the excess policy.  In Privilege Underwriters Reciprocal Exchange v. Hilinksi, 105 Mass. App. Ct. 329 (2025), the Court reversed a trial court ruling that denied insured’s claim and found that because the particular follow-form did not clearly and unambiguously incorporate underinsured motorist coverage (UIM coverage) exclusions from the underlying policy, the insureds were entitled to UIM coverage under the excess policy.

In Privilege, the plaintiff’s teenage daughter suffered a severe knee injury while riding as a passenger in their golf cart being driven by a friend.  The alleged damages exceeded $2,500,000.  When the accident occurred, the plaintiff held an automobile policy and excess policy from Privilege Underwriters Reciprocal Exchange (“Privilege”).  The automobile policy provided $250,000 in bodily injury coverage and $250,000 in UIM coverage. The excess policy provided $10,000,000 in excess liability coverage and $1,000,000 in excess UIM coverage.  After a claim was submitted on the daughter’s behalf, Privilege offered $250,000, the bodily injury limit under the automobile policy.  Privilege denied there was excess liability coverage under the excess policy or UIM coverage under either policy. The parties cross-moved for summary judgment, and Privilege’s motion was granted. The plaintiff appealed.

Typically, an insured bears the initial burden of proving that the claimed loss falls within the coverage of their insurance policy.  If an insured meets that burden, the burden shifts to the insurer to show that a separate coverage exclusion applies.  When policy language is ambiguous, Massachusetts courts have held that questions regarding the intended meaning of the words must be resolved against the insurance company that employed them and in favor of the insured. 

The Appellate Court agreed with the insured plaintiff that their daughter was entitled to UIM coverage under the excess policy.  The Court found the grounds the trial court relied on to deny coverage under the excess policy assumed that the follow-form provision in the excess policy makes the same limitations or exclusions to UIM coverage under the automobile policy also applicable to UIM coverage under the excess policy.  The Court reiterated the Supreme Judicial Court of Massachusetts’ explanation that a follow-form provision can allow an insured to have the same exclusions in each layer of an insurance program by making an excess policy a carbon copy of the primary policy, with only differences being the party names and coverage limitations.  The Court in this case characterized the follow-on form as “ambiguous” and “confusing,” and found it conflated liability coverage with UIM coverage.  This, along with other ambiguities, resulted in the conclusion that the meaning of the excess policy language must be resolved in favor of the insured plaintiff and their UIM coverage claim under the excess policy allowed.

From a defense perspective, it is incumbent on insurance carriers to use clear and unambiguous language to uphold any intended exclusion provisions in insurance policies.

Three Arrested in Alleged Insurance Fraud Scheme in Hialeah

In a recent crackdown on insurance fraud, three individuals were arrested in Hialeah, Florida, for allegedly staging car accidents to defraud insurance companies. The arrests took place at MO Medical Center, following a raid by the Miami-Dade County Sheriff's Office (MDSO) on Tuesday.

The accused are Yisell Rojas, 39, the clinic's owner; Ofir Macias, 55, a therapist; and Ivian Nieto Lazo, 37. Authorities became aware of the clinic's suspicious activities after a driver involved in a purported accident in November 2024 attempted to add another individual to the traffic crash report. Upon reviewing body camera footage, deputies observed inconsistencies between the vehicle's damage and the manner in which the crash was reported.

During police interviews, the suspects allegedly confessed that Nieto Lazo had instructed them to visit MO Medical Center to report a fabricated accident in order to receive compensation. Rojas reportedly guided them to sign and place their thumbprints on numerous therapy forms, which were essential for processing their fraudulent claims. Investigators revealed that the suspects were allegedly coached on what to say if questioned about their injuries, the names of therapists, and the location of their attorney's office. This systematic approach to staging accidents and submitting false claims indicates a well-organized operation.

When deputies executed the raid, Rojas was taken into custody in her office, while Macias arrived at the clinic shortly thereafter. During questioning, Macias reportedly confessed to signing medical therapy forms for patients he had neither seen nor treated. He stated that Rojas would provide him with patient charts that included pre-signed therapy forms and thumbprints, describing this practice as standard at the clinic.

The suspects are currently being questioned and are expected to face serious charges, including racketeering, insurance fraud, and patient brokering.

The investigation is part of a broader effort to dismantle a criminal ring that allegedly orchestrates fake car accidents, recruits fictitious patients, and submits fraudulent claims to secure millions in payouts. This operation underscores the importance of vigilance in the healthcare and insurance sectors, as authorities work diligently to combat fraudulent activities that threaten the integrity of the system.