Court dismisses claim of insurance fraud

A court has ordered an insurance company to pay a boat-owner €23,300 after it rejected their assertion that the owner’s claim for the theft of his cabin cruiser was fraudulent, based on a single report by the owner's estranged brother.

The facts of the case date back to November 2000 when the plaintiff, Anthony Baldacchino, had opened an insurance claim with Gasan Mamo Insurance, alleging that at some point between the 4th and the 9th of that month his Sunseeker had been stolen from its mooring at the Ta’ Xbiex marina.

The insurance company however suspected the claim to be fraudulent and had informed the police, also refusing to settle the claim.

A Gasan Mamo representative testified that prior to the opening of the claim, he had been called by Rein Caruana, executive manager at Global Insurance Brokers, in which the broker had explained that he had received a tip-off from an anonymous caller, who later identified himself as the plaintiff’s brother, Paul Baldacchino.

The caller had allegedly warned the Caruana that Anthony Baldacchino’s boat was going to be stolen or destroyed. The police were then informed and had investigated the case, also inspecting a garage in Qormi where the boat might have been hidden.

However, no evidence supporting the story was recovered by the police. Summoned to testify, Caruana had also denied making any telephone calls to the insurer about this case.

The insurer had correctly conducted its own investigations, noted the court, having engaged a private investigator who, however, terminated his investigation prematurely as “he did not want to have anything to do with the people involved.”

In his judgment, judge Lawrence Mintoff held that the representative’s testimony was inadmissible as it was hearsay, according to law. Gasan Mamo’s case therefore rested solely on the testimony of Paul Baldacchino.

The court expressed reservations about the credibility and genuine nature of Paul Baldacchino’s testimony, noting that the two brothers had not been on speaking terms for the ten years leading up to the incident and that Paul had wanted to pay his brother back for reporting Paul’s son to the police in a separate case. 

The judge felt that his testimony was “not at all credible” as it was “clearly prompted by his anger and wish for vengeance against his brother.”

Judge Mintoff held that the insurance company did not have a good reason to refuse the plaintiff’s claim, solely on the basis of the telephone call from Paul Baldacchino, especially when the police had concluded that this was not a case of insurance fraud.

In finding for the plaintiff, the court ordered the insurance company to pay Baldacchino €23,300, the sum for which the vessel had originally been insured and pay the judicial costs of the case.