Special Investigations Unit- Body Shop Fraud

During a separate insurance fraud investigation, Smith Freed & Eberhard attorneys discovered that the insured’s husband, who was insured by another company and was the owner of a body shop, had damaged his car intentionally to defraud his insurance company by collecting payments for the repair work.

Smith Freed & Eberhard was retained by the husband’s insurer to pursue a lawsuit against the husband and the body shop for payments previously made by the insurer. The insured’s wife refused to cooperate with the investigation:  avoiding process servers and failing to appear for two subpoenaed depositions.  Ultimately, alternate means were employed to effectuate service for a third deposition, for which she finally appeared. During this deposition, she initially continued her pattern of noncooperation and resistance, but after an hour and a half of strategic questioning, eventually provided testimony that her husband had in fact intentionally damaged the vehicles. 

At arbitration,  an attorney successfully argued that the standard of proof was a preponderance of evidence, rather than clear and convincing evidence, because the fraud was perpetuated under an insurance contract. Under this standard, Smith Freed & Eberhard  overcame defense arguments that insured’s wife was a scorned lover, and therefore, a biased witness. Kyle turned this argument on its face and affirmatively convinced the arbitrator the husband was not credible and that husband intentionally caused the damage to the vehicle, thus resulting in a finding the husband and body shop committed insurance fraud. Ultimately, the arbitrator found in favor of Smith Freed & Eberhard ’s client and awarded damages and costs against the insured.