NEW JERSEY SUPREME COURT CONFIRMS INSURANCE FRAUD LAW DOES NOT REQUIRE THAT THE CARRIER BE INDUCED BY A FALSE STATEMENT TO PAY A DAMAGE CLAIM.

In a unanimous opinion released today the New Jersey Supreme Court held that a violation of the criminal insurance fraud statute, N.J.S.A. 2C:21-4.6(a), does not require proof that a false statement made by the defendant induced the insurance carrier to pay the claim.

In State of New Jersey v. Robert Goodwin, (A-20-14) (0743520 (decided January 19, 2016) http://www.judiciary.state.nj.us/opinions/supreme/A2014StatevRobert.pdf the New Jersey Supreme Court reinstated the conviction of Goodwin for insurance fraud.  Goodwin lived with his girlfriend “Stacey”, who owned a 1999 Chevy Tahoe she insured with Progressive Insurance Company.  On September 13, 2009, Goodwin took the Tahoe from its normal parking location in front of the building where he lived with Stacey and drove it to another location where he met with another woman whom he was dating without Stacey’s knowledge.  While he was with her, someone set the Tahoe on fire.

Goodwin told Progressive that he parked the Tahoe in front of the apartment where he lived with Stacey, had the only set of keys, and that it had been stolen and torched.  Progressive never believed the vehicle was stolen. A Newark Fire Department arson investigator determined that the fire was intentionally set with gasoline and the Tahoe was driven to the scene of the fire with the ignition key.  Consequently, Progressive denied Stacey’s claim.

Charged criminally with arson, attempted theft by deception, and insurance fraud a jury convicted Goodwin only of insurance fraud.  On appeal, the panel determined that because Progressive knew the Tahoe was not stolen and denied the claim no insurance fraud occurred.  The Supreme Court disagreed, finding that the statute required only that the defendant knowingly make or cause to be made a false statement of material fact as part of a claim for payment pursuant to an insurance policy.   Weighing in on the proper interpretation of “material”, the Supreme Court found that a statement that “could have affected the outcome of the proceeding or the disposition of the matter” even if it did not actually corrupt the proceeding.  This is consistent with interpretations of the perjury statute, N.J.S.A. 2C:28-1(b), and definitions applied by federal courts, Black’s Law Dictionary and Webster’s New World College Dictionary.

To avoid confusion this is the portion of the Model Jury charge should be used in defining “material fact” in criminal insurance fraud cases:

• “[T]he statement of material fact is material if it could have reasonably affected the decision by an insurance company to provide insurance coverage to a claimant of the decision to provide reimbursement or the decision to pay a claim.”

The Supreme Court reaffirmed that the intent of insurance fraud legislation is to punish wrongdoers and deter others and that their application is not limited to only those cases in which an individual succeeded in inducing an insurance carrier to pay a false claim.

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Our attorneys also represent insurance carriers in subrogation claims, helping you seek reimbursement from other insurers for costs you have incurred due to the wrongdoing of their insureds. To learn how we can help you, contact the Haddonfield insurance carrier attorneys online or call us in Haddonfield, New Jersey, at 856-429-1060.