In State Auto Prop. & Cas. Ins. Co. v. Sigismondi Foreign Car Specialists, Inc., the Third Circuit upheld the District Court’s finding that the policyholder had committed insurance fraud when it provided altered invoices to support the values being claimed for allegedly damaged business personal property.
The policyholder initially argued that the altered invoices were not material to State Auto’s investigation. Then, after initial summary judgment briefing was completed, the policyholder attempted to change course and argue that it did not knowingly or in bad faith provide false or misleading information by submitting the altered invoices and also that the altered invoices themselves were not misleading. The District Court held that these late-raised arguments had been forfeited, and the Third Circuit agreed.
Ultimately, the Third Circuit, relying on recent precedent from the Pennsylvania Superior Court, held that the falsified invoices were undoubtedly material because they were part of an effort to determine the value of the insured items. In so holding, the Court found that the District Court had properly entered judgment in favor of State Auto on the insurance fraud claim.
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