Congratulations to MBL Principal James Flynn and Associate Landon Ferris in securing a summary disposition win for an insurance client. The plaintiff, a medical provider, filed a lawsuit seeking benefits for treatment provided after an alleged accident. When the claim was investigated, MBL’s client discovered their policyholder lied on their application for insurance and then voided the policy. Though this used to be an ultimate defense to all claims made, recent appellate opinions have changed this area of law. Now, insurers who rescind policies must prove that medical providers are not innocent third parties, or they could otherwise still have to pay claims on fraudulently obtained policies.

James effectively argued at the hearing that, though the provider may not have been responsible for the original fraud, the equity weighed in favor of MBL’s client. Insurers cannot be required to pay for fraudulently induced claims, especially when considering medical providers have other avenues for payment, including from the individual who perpetrated the fraud. This is a dramatic win in the face of precedent that is increasingly difficult to navigate.