INSURANCE FRAUD: OMISSION OF MATERIAL FACT (PAYMENT)
(N.J.S.A.
2C:21-4.6a(3)) model jury charge
The defendant is charged in count
_____ of the indictment with insurance fraud.
[READ COUNT OF INDICTMENT]
Our statutes provide
that:
A person is guilty of a
crime... if that person knowingly...omits or causes a material fact to be
omitted from any record, bill, claim or other document, in writing,
electronically, orally or in any other form that a person attempts to submit,
submits, causes to be submitted, or attempts to cause to be submitted as part
of, in support of, or opposition to, or in connection with, a payment or
payment to be made in accordance with the terms of an insurance policy or
premium finance transaction.
In order to convict defendant, the State must prove
beyond a reasonable doubt the following three elements:
(1)
that the defendant knowingly omitted
a fact or caused a fact to be omitted from a record, bill, claim, or other
document, in writing, electronically, orally or in any other form;
(2)
that the defendant (CHOOSE APPROPRIATE) (submitted)(caused
to be submitted)(attempted to submit)(or attempted to cause to be submitted) that
record, bill, claim or other document, electronically, orally or in any other
form as (part of)(in support of)(in opposition to)(in connection with) a
payment or a payment to be made in accordance with an insurance policy or
premium finance transaction;
(3) that the omitted fact was material.
The
first element that the State must prove beyond a reasonable doubt is that the defendant
knowingly omitted a statement of fact or caused to be omitted a statement of
fact from a record, bill, claim or other document. The statement may have been made in writing,
electronically, orally or in any other form.
A person acts knowingly
with respect to the nature of his/her conduct or the
attendant circumstances if he/she is aware that his/her conduct is of that
nature, or that such circumstances exist, or he/she is aware of a high probability of their existence. A person acts knowingly with respect to a
result of his/her conduct if he/she is aware that it is practically certain that his/her conduct will cause such
a result. "Knowing,"
"with knowledge," or equivalent terms have the same meaning.
Knowingly is a state of mind and cannot be seen and can only be determined by
inference from conduct, words or acts.
Therefore, it is not necessary that witnesses be produced by the State
to testify that a defendant said that he/she knowingly did something.
his/her knowledge may be
gathered from his/her acts and his/her conduct and from all he/she said and did at the particular time and place and from all
the surrounding circumstances reflected in the testimony [and evidence adduced
at trial].
The second element the
State must prove beyond a reasonable doubt is that the defendant (submitted) (caused
to be submitted) (attempted[1] to submit)(attempted to
cause to be submitted) the statement (as part of) (in connection with)(in
support of)(in opposition to) a payment made or to be made in accordance with
the terms of an insurance policy or premium finance transaction.
"Insurance policy" means the instrument, in writing,
electronically or in any other form, in which are set forth the terms of any
certificate of insurance, binder of coverage, contract of insurance or contract
of re-insurance, issued by an insurance company, including, but not limited to,
a State-assigned risk plan, plan of indemnity protection provided by or on
behalf of a joint insurance fund or benefit plan, motor club service plan, or
guaranty bond, surety bond, cash bond or any other alternative to insurance
authorized or permitted by the State of New Jersey.[2]
“Insurance company” means any person, company, corporation,
unincorporated association, partnership, professional corporation, agency of
government and any other entity authorized or permitted to do business in New
Jersey, subject to regulation by the State, or incorporated or organized under
the laws of any other state of the United States or of any foreign nation or of
any province or territory thereof, to indemnify another against loss, damage,
risk or liability arising from a contingent or unknown event. Insurance company includes, but is not
limited to, an insurance company as that term is defined in section 3 of P.L.1983,
c. 320 (C.17:33A-3), self-insurer, re-insurer, reciprocal
exchange, inter-insurer, hospital, medical or health service corporation,
health maintenance organization, surety, assigned risk plan, joint insurance
fund, and any other entity legally engaged in the business of insurance as
authorized or permitted by the State of New Jersey, including but not limited
to any such entity incorporated or organized under the laws of any other state
of the United States or of any foreign nation or of any province or territory
thereof.[3]
[CHARGE APPROPRIATE
SECTION IF APPLICABLE:
Insurance
company includes, but is not limited to, an insurance company which can be in
the form of any corporation, association, partnership, reciprocal exchange,
interinsurer, Lloyd's insurer, fraternal benefit society or other person
engaged in the business of insurance pursuant to Subtitle 3 of Title 17 of the
Revised Statutes (C.17:17-1 et seq.), or Subtitle 3 of Title 17B of the
New Jersey Statutes (C.17B:17-1 et seq.); or any medical service
corporation operating pursuant to P.L.1940, c. 74 (C.17:48A-1 et seq.); or any hospital service corporation operating pursuant to P.L.1938,
c. 366 (C.17:48-1 et seq.); or any health service corporation operating
pursuant to P.L.1985, c. 236 (C.17:48E-1 et seq.); or any dental service corporation operating pursuant to P.L.1968,
c. 305 (C.17:48C-1 et seq.); or any dental plan organization operating pursuant to P.L.1979,
c. 478 (C.17:48D-1 et seq.); or any insurance plan
operating pursuant to P.L.1970, c. 215 (C.17:29D-1); or the
New Jersey Insurance Underwriting Association operating pursuant to P.L.1968,
c. 129 (C.17:37A-1 et seq.); or the New Jersey Automobile Full Insurance Underwriting Association operating pursuant to P.L.1983,
c. 65 (C.17:30E-1 et seq.) and the Market Transition
Facility operating pursuant to section 88 of P.L.1990, c. 8 (C.17:33B-11); or any risk retention group or purchasing group operating
pursuant to the "Liability Risk Retention Act of 1986," 15 U.S.C. § 3901 et seq. [4], or a self-insurer, re-insurer, reciprocal
exchange, inter-insurer, hospital, medical or health service corporation,
health maintenance organization, surety, assigned risk plan, joint insurance
fund, and any other entity legally engaged in the business of insurance as
authorized or permitted by the State of New Jersey, including but not limited
to any such entity incorporated or organized under the laws of any other state
of the United States or of any foreign nation or of any province or territory
thereof.[5]
Premium finance transaction means a transaction involving or
related to insurance premium financing which is subject to the Insurance
Premium Finance Company Act, P.L. 1968, c. 221 (N.J.S.A.
17:16D-1 et. seq.][6]
[RESUME
MAIN CHARGE]
The third element the
State must prove beyond a reasonable doubt is that the statement omitted was
material.
An omitted
fact is material if, at the time when the statement should have been made, a
reasonable insurer would have considered the omitted fact relevant to its
concerns and important in determining its course of action.[7] In other words, the statement of fact is
material if it could have reasonably effected the decision by an insurance
company to provide any benefit pursuant to an insurance policy or the decision
to provide reimbursement or the decision to pay a claim. (THE COURT SHOULD TAILOR THIS PORTION OF THE CHARGE TO THE FACTS IF
MATERIALITY IS DISPUTED)
[8]
[CHARGE IF APPLICABLE]
If you find that ________ signed or initialed an
application, bill, claim, affidavit, certification, record or other document,
then you may infer that he/she read and reviewed the application, bill, claim, affidavit,
certification, record or other document.
An inference is a deduction of fact that may be drawn
logically and reasonably from another fact or group of facts established by the
evidence. Whether or not an inference
should be drawn is for you to decide using your own common sense, knowledge and
everyday experience. Ask yourselves is
it probable, logical and reasonable.
However, you are never required or compelled to draw an inference. You alone decide whether the facts and
circumstances shown by the evidence support an inference and you are always
free to draw or not to draw an inference.
If you draw an inference, you should weigh it in connection with all the
other evidence in the case keeping in mind that the burden of proof is upon the
State to prove all the elements of the crime beyond a reasonable doubt.
[CHARGE IF APPLICABLE]
(Multiple fraudulent statements alleged in a single
narrative or document)
The State alleges that the defendant omitted multiple
statements of facts that are alleged to be material. Multiple fraudulent statements may be
considered by you to constitute
multiple acts of insurance fraud only if the alleged fraudulent statement
relates to a conceptually distinct claim. (Here, the State alleges the claims
are distinct: Instruct the jury as to the nature of the
State’s claim. Charge the defendant’s version, if requested.)
If the multiple
statements made in a single narrative or document relate to a claim that is
conceptually similar, it may then constitute only a single act of insurance
fraud.[10] Thus, you must unanimously find that the
State has met its burden to prove the four elements that I have defined for you
as to a particular statement contained in any single narrative or document. [11] In other words, all
twelve of you must agree that a particular statement contained in the narrative
or document satisfies all four elements beyond a reasonable doubt in order to
find the defendant guilty.
[RESUME MAIN CHARGE]
If the State has failed to prove any of these elements
beyond a reasonable doubt, then you must find defendant not guilty of the crime
of insurance fraud. If you find that the
State has proven beyond a reasonable doubt each of the four elements, then you
must find defendant guilty of the crime of insurance fraud. If you find the defendant guilty of the crime
of insurance fraud, you must then go on to consider the following.
[CHARGE IF SECOND DEGREE INSURANCE FRAUD IS ALLEGED]
If you find that the State has proven the defendant
guilty of insurance fraud, you must then consider if the defendant knowingly
committed five or more acts of insurance fraud that had an aggregate value of
at least one thousand dollars.
A section of our statute
provides that insurance fraud is a crime of the third degree, except that it is
a crime of the second degree if the defendant knowingly committed five or more
acts of insurance fraud that had an aggregate value of at least one thousand
dollars.[12]
I have already defined the mental state of
knowingly for you.
An omitted material fact contained in a separate document
or narrative relating to a single application may each constitute a separate
act of insurance fraud.[13] However, multiple
statements in the same narrative or document relating to a conceptually similar
claim may only constitute a single act of insurance fraud. Thus, to find five or more acts, you must find
that the State has proven beyond a reasonable doubt, that the defendant
knowingly made false, fictitious, fraudulent or misleading statements or
omitted a material fact or caused to have omitted a material fact in five or
more discrete documents or narratives.
Statements relating to the same application that are contained in
separate narratives or documents may constitute more than a single act, if the
State has proven beyond a reasonable doubt that defendant submitted (caused to
be submitted) (attempted[14] to submit)(attempted to
cause to be submitted) the particular statement (as part of) (in connection
with)(in support of)(in opposition to) a payment made or to be made in
accordance with the terms of an insurance policy or premium finance
transaction.
[CHARGE IF APPROPRIATE]
For example, if a document omitted a particular illness
history and omitted the number of claims previously made by an insured, that
would still constitute only a single act of insurance fraud. If, however, the
omitted fact of the illness history was made in one document, and the number of
claims previously made was omitted in another document, even if the statements
were made in connection with the same payment, that would constitute separate
acts of insurance fraud.[15]
[RESUME MAIN CHARGE]
The State must also
prove beyond a reasonable doubt that the total value of the property, services
or other benefit wrongfully obtained or sought to be obtained was $1,000 or
more.
In summary, if you find
that the State has failed to prove any of the elements of the crime of
Insurance Fraud, you must find the defendant not guilty. If you find the State
has proven beyond a reasonable doubt all of the elements of insurance fraud,
and the State has proven beyond a reasonable doubt that the defendant committed
five or more acts of insurance fraud, and that the total value of the acts was
one thousand dollars ($1,000) or more, then you must find the defendant guilty
of Insurance Fraud in the Second Degree. If you find the State has failed to
prove either that the defendant committed five or more acts of insurance fraud,
or that the total value was one thousand dollars or more, beyond a reasonable
doubt, but find that the State has proven all of the other elements of Insurance
Fraud beyond a reasonable doubt, then you must find the defendant not guilty of
Insurance Fraud in the Second Degree, and you must find the defendant guilty of
Insurance Fraud in the Third Degree.
[1] If
attempt is charged, the jury should be instructed from the Model Jury Charge,
Attempt N.J.S.A. 2C:5-1, as
attempt requires a purposeful mental state.
[3] Id.
[4] P.L. 1983, c. 320 (sec. 3)(N.J.S.A.
17:33A-3).
[5] N.J.S.A. 2C:21-4.5.
[7] Longobardi v. Chubb Ins.
Co. of New Jersey,
121 N.J. 530, 540-541 (1990). In Longobardi, the N.J. Supreme
Court examined materiality of fraudulent representations in the context of
denial of coverage actions, and the Court adopted an objective standard for
materiality. It is unclear from the penal
statute whether the materiality of a statement must be judged by an objective
or subjective standard. If the standard would be subjective, then the jury
should be instructed that the State must provide evidence of actual detrimental
reliance by the alleged victim or victim(s) to prove this element beyond a
reasonable doubt.
[8] See Model Jury Charges, Criminal, Perjury, N.J.S.A.
2C:28-1b. This paragraph should be
tailored to the appropriate facts of the case if the issue regarding
materiality is disputed or falls outside the examples cited. The New Jersey Supreme Court has consistently
held that the subjective good faith of the applicant regarding an “innocent”
mistake was not relevant to the materiality determination. Palisades Safety
and Ins. Ass’n v. Bastien, 175 N.J. 144, 151 (1995).
[10] State v. Fleischman, 189 N.J. 539, 554 (2007).
As an example where multiple false statements in a single narrative would
constitute separate acts, Fleischman points to the situation where a
false statement is made that an automobile was stolen, and that a false claim
was made that a fur coat was in the automobile at the time of the theft. This
would constitute separate acts of insurance fraud, even if contained in a
single narrative. Id. at 546-547 n.3.
[11] The Committee’s view is that this specific unanimity charge
is required as to a particular statement pursuant to State v. Frisby,
174 N.J. 583 (2002) and State v. Gentry, 183 N.J. 30
(2005) and the cases cited therein as a matter of state constitutional law.
Although a specific unanimity charge is not required in every circumstance
where the jury must find some preliminary factual circumstances which might be
evidence of a single course of conduct, see
e.g. State v. Parker, 124 N.J. 628, 633 (1994) and examples
cited therein, the discrete inquiry the jury must undertake regarding the
materiality of a statement seems to make this scenario more like those examples
cited in Frisby and Gentry which require a specific unanimity
instruction as opposed to Parker and examples cited therein. A special
verdict form may be needed to be used if the circumstances warrant.
[12] N.J.S.A. 2C:21-4.6(b). The statute states that claims
of health care claims fraud can be aggregated under this section. If there are
allegations of health care claims fraud, N.J.S.A. 2C:21.4.2, the Model
Jury Charge on Health Care Claims Fraud should be used as appropriate for those
alleged acts.
[13] State v. Fleischman, 189 N.J. at 554.
[14] If attempt is charged, the jury should be instructed from the
Model Jury Charge, Attempt N.J.S.A.
2C:5-1, as attempt requires a purposeful mental state.
[15] The
trial court should not charge similar examples which mirror the acts alleged in
the indictment. The examples above should be changed if that occurs.
