Insurers Frustrated by Lack of Prosecution for Insurance Fraud Proactively Sue Chiropractors they Claim Defrauded the Insurers 

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Insurers, victims of insurance fraud, see little or no prosecution of those who defraud them. State Farm, not willing to wait, proactively sued defendants James Marshall, D.C. and Marshall Chiropractic, LLC (collectively “Defendants”) for fraud. After discovery was completed the Chiropractors moved for summary judgment seeking dismissal of State Farm’s suit. In State Farm Guaranty Insurance Company, and State Farm Indemnity Company v. Marshall Chiropractic, LLC and James Marshall, D.C., Civil Action No. 20-1918 (MAH), United States District Court, D. New Jersey (September 17, 2021) the USDC was asked to dismiss because State Farm failed to file an  affidavit of Merit asserted against the chiropractors required of malpractice suits against health care providers. State Farm did not allege malpractice.

ZALMA OPINION

State Farm, and other insurers, that proactively sue the persons and entities they believe are defrauding them have found that taking money from fraudsters is more effective than the rare prosecution by the state of the fraud perpetrators. As victims of fraud any insurer has the right to be indemnified from the fraudsters and, more importantly, take the profit out of the crime. Waiting for a state prosecutor – especially with some state prosecutors who are averse to even prosecuting serious criminal activities like assault, battery, and murder, it is time that all insurers – if their SIU develops evidence that they are being defrauded – should proactively file for damages under the state fraud statutes and the federal RICO statutes.