SLAPP Motion Appropriate When Fraud Perpetrators Sue Insurers and Their Lawyers

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Nine insurers sued Ajay Mohabeer for fraudulently billing them for medical treatment never provided nor provided in the amounts charged. The insurers sued, lost a partial summary judgment, and rather than go on to trial on other causes of fraud, settled the suit with Dr. Mohabeer. Unhappy with the settlement Dr. Mohabeer sued the insurers and their lawyers for wrongful use of civil proceedings and damages (called malicious prosecution in other jurisdictions) 

The allegations of plaintiffs claim are based solely on written statements and documents provided to the federal court in the context of the underlying action. The only dispute on appeal concerns whether plaintiff has met his burden to present prima facie evidence as to each element of his claim of wrongful use of civil proceedings.

ANALYSIS

One element of the claim of wrongful use of civil proceedings is an absence of probable cause to prosecute the underlying action. In the context of the special motion to strike, however, the existence of prima facie proof of the elements of the claim being challenged by the motion is something that the court determines as a matter of law, based on the pleadings and supporting and opposing affidavits stating the facts upon which the liability or defense is based.

The court agreed with defendants’ argument that that is evidence that the claims brought by defendants in the underlying action were objectively reasonable and based on probable cause.

ZALMA OPINION

Farmers and the other insurers defendant should be honored for proactively working to defeat a fraudulent claims. By not taking the case to trial after losing a partial summary judgment motion and stipulating that the case was resolved in the favor of the plaintiff they invited his suit. The lesson learned by the insurers was that they should have taken Dr. Mohabeer to trial on the causes that they could have proved were fraudulent. Settlement is not appropriate when evidence of fraud exists.

(c) 2022 Barry Zalma & ClaimSchool, Inc.

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