In The News

Daily Journal Features Principal Dave Ezra in “Fraud and Collusion Defenses Can be Risky”

(filed under: In The News | December 4, 2015)

The Daily Journal, California’s most esteemed legal publication, highlighted David Ezra’s column regarding the dangers of asserting the fraud or collusion defense in insurance claims, with  insightful background on why it may be problematic, and his suggestions on navigating this issue.

Author David Ezra, Principal at Berger Kahn in Orange County, says about the collusion defense:

“But asserting a fraud or collusion defense can also backfire.  The insurer who denied the request for defense and left the policyholder to fend for himself or herself effectively ‘doubles down’ by asserting a fraud or collusion defense.

Often in a context where a court will find (or has already found) that a duty to defend existed, the insurer who is up against the ropes comes out swinging even harder, accusing the policyholder, the claimant, and on rare occasion, even a retired judge or arbitrator, of dishonesty and deception.

If the insurer falls short of proving fraud or collusion, the jury is likely to see the failed defense as an improper act of hostility.  This could cause the jury to reward claimants with larger damages assessments.  Bad faith and even punitive damages may be more likely when a non-defending insurer unsuccessfully asserts a fraud or collusion defense.”