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State v. Fleischman

March 19, 2007

STATE OF NEW JERSEY, PLAINTIFF-APPELLANT,
v.
RANDI FLEISCHMAN, DEFENDANT-RESPONDENT.



On appeal from the Superior Court, Appellate Division, whose opinion is reported at 383 N.J. Super. 396 (2006).

SYLLABUS BY THE COURT

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

In this appeal, the Court must determine how to construe the term "statement" in subsection a. of N.J.S.A. 2C:21-4.6 to ascertain whether defendant Randi Fleischman engaged in a sufficient number of acts of insurance fraud to elevate the charged crime from third-degree to second-degree.

On December 4, 2003, after having made arrangement for a friend to dispose of her 2000 Chrysler Sebring, Fleischman contacted the Edison police to report that her car had been stolen. She told police that she arrived alone at the Menlo Park Mall at 5:30 p.m. on December 4, 2003, and subsequently discovered that her car had been stolen when she returned to the parking lot at 6:15 p.m. Fleischman also contacted her automobile insurer, Liberty Mutual Insurance Company, to report that her car had been stolen. In that conversation, Fleischman stated that she and a friend arrived at the mall at 9:00 a.m. on December 4th and discovered at 6:30 p.m. that the car had been stolen.

On December 12, 2003, Fleischman filed with Liberty Mutual an Automobile Theft Affidavit, in which she swore that the automobile had been stolen from the Menlo Park Mall parking lot, that she did not know the thief's identity, and that she had no information about the car's whereabouts. Fleischman's affidavit also stated that she did not own any other automobile and that her car had not been for sale. Fleischman subsequently admitted that her car had not been stolen and withdrew her insurance claim. A grand jury indicted Fleischman, charging her with second-degree insurance fraud, N.J.S.A. 2C:21-4.6; third-degree attempted theft by deception, N.J.S.A. 2C:20-4; third-degree tampering with public records, N.J.S.A. 2C:28-7(a)(2); and fourth-degree false swearing, N.J.S.A. 2C:28-2(a). Five acts of insurance fraud specifically were alleged to support the second-degree insurance fraud charge: (1) Fleischman's oral report to Liberty Mutual that her car was stolen; (2) her false affidavit submitted to Liberty Mutual in support of her claim; (3) her statement to the Edison Police that she arrived alone at the mall at 5:30 p.m.;

(4) her contradictory statement that she arrived at the mall with a friend at 9:00 a.m.; and (5) her statements to Liberty Mutual that she did not own any other vehicles and that her Sebring was not for sale.

Fleischman moved to dismiss her indictment in its entirety and, alternatively, to dismiss the second-degree insurance fraud count (Count One). The motion court found that the State presented only three acts of insurance fraud: Fleischman's fraudulent report to Liberty Mutual; the false affidavit that she submitted to Liberty Mutual; and Fleischman's fraudulent police report. Accordingly, the court dismissed Count One, leaving intact the remaining charges. On leave to appeal granted to the State, the Appellate Division affirmed. State v. Fleischman, 383 N.J. Super. 396 (2006). This Court granted leave to appeal.

HELD: When a defendant provides to officials in connection with a fraudulent claim a document or oral narrative that contains material facts relating to the claim, each such document or narration is a "statement" equating to an "act" of insurance fraud. The Court rejects the assertion that every discrete fact within a narrative about a single claim amounts to an "act" of insurance fraud.

1. Pursuant to the New Jersey Code of Criminal Justice, one can be charged with the offense of insurance fraud for knowingly making a false or misleading statement of material fact in connection with an insurance claim. N.J.S.A. 2C:21-4.6. That third-degree offense may be elevated to the second degree by aggregating five "acts" of insurance fraud, the total value which exceeds $1,000. (pp. 1-2)

2. In 1983, the Legislature passed the Insurance Fraud Prevention Ac (IFPA), N.J.S.A. 17:33A-1 to -14. In 2003, the Legislature added the crime of insurance fraud to the Code of Criminal Justice. Pursuant to N.J.S.A. 2C:21-4.6(a), a person commits "insurance fraud" when one "knowingly makes, or causes to be made, a false, fictitious, fraudulent, or misleading statement of material fact ." (Emphasis added). The State argues that "statement" should encompass each fraudulent factual declaration within a single oral or written assertion or submission made in connection with a fraudulent claim. Fleischman asserts that "statement" should be generally coextensive with a person's narration or report submitted in connection with the claim. (pp. 5-7)

3. N.J.S.A. 2C:21-4.6(a)'s reference to a "statement" is ambiguous. (pp. 7-11)

4. Extrinsic materials, such as the Legislature's statement in N.J.S.A. 2C:21-4.4(a) to (c) and the Health Care Claims Fraud Act, are of little assistance in resolving whether discrete facts within a single narrative advanced in furtherance of a fraudulent insurance claim should be considered individual fraudulent "acts." (pp. 11-15)

5. IFPA, the predecessor to the instant criminal provision, addressed insurance fraud through the imposition of stiff civil penalties. Although civil in nature, IFPA punished the submission of a false or misleading "statement" through language essentially identical to that which now appears in the criminal statute. N.J.S.A. 17:33A-4. In Merin v. Maglaki, 126 N.J. 430 (1992), the Court construed that IFPA language where an individual submitted six documents in connection with a fraudulent attempt to receive life insurance benefits for his wife. The Court concluded that each document constituted a separate false statement in respect of the fraudulent claim. The Merin holding reinforces that the violations were based on each submission of a knowing and material false statement in its totality, which significantly enhanced the credibility or evidence of the fraudulent claim. (pp. 15-18)

6. In light of the connection between the IFPA and the later crime of insurance fraud, defined in similar language, the Court concludes that the Legislature would have presumed that each document or narrative statement containing materially false facts would be held to be a separate "act" of insurance fraud. This effectuates the legislative intent to be tough on insurance fraud, but in a way that takes into consideration whether Fleischman reasonably should have been aware that three "acts" of insurance fraud would have been committed by knowingly making three reports of her loss that repeated and augmented the asserted authenticity of her fraudulent claim. Fleischman concedes that the three statements she made in connection with her alleged stolen car claim constituted three acts of insurance fraud. (pp. 18-19)

7. The Court rejects the argument that more than five "acts" of insurance fraud were perpetrated by Fleischman when she made three statements in support of her fraudulent insurance claim. Each document or oral narrative is a "statement" equating to an "act" of insurance fraud, not every discrete fact within a narrative assertion about a single claim. The State presented three "acts" of insurance fraud to the grand jury: Fleischman's report to the police, Fleischman's oral report of the alleged theft to Liberty Mutual, and Fleischman's affidavit submitted to Liberty Mutual in support of her claim. (pp. 19-20)

The judgment of the Appellate Division is AFFIRMED.

JUSTICE LONG has filed a separate, CONCURRING opinion, in which JUSTICE ALBIN joins, concluding that the Legislature, in enacting N.J.S.A. 2C:21-4.4 to -4.7, did not intend to criminalize every false document submitted by a defendant in connection with a single insurance claim.

CHIEF JUSTICE ZAZZALI and JUSTICES WALLACE and RIVERA-SOTO join in JUSTICE LaVECCHIA's opinion. JUSTICE LONG filed a separate concurring opinion in which JUSTICE ALBIN joins. JUSTICE HOENS did not participate.

The opinion of the court was delivered by: Justice LaVECCHIA

Argued November 29, 2006

Corrected March 26, 2007

Pursuant to the New Jersey Code of Criminal Justice (Code), one can be charged with the offense of insurance fraud for knowingly making a false or misleading statement of material fact in connection with an insurance claim. N.J.S.A. 2C:21-4.6.

That third-degree offense may be elevated to the second degree by aggregating five "acts" of insurance fraud, the total value of which exceeds $1,000.

The State indicted defendant Randi Fleischman for second-degree insurance fraud. The factual underpinnings for the charge were based on various items of false information contained in defendant's statements to the police and to her automobile insurer in connection with a stolen car claim. Defendant challenged the sufficiency of the evidence to support the indictment, claiming that her three statements (made when reporting to the police that her car had been stolen and when submitting an oral and then written insurance claim) constituted only three "acts" of insurance fraud. This appeal provides the Court with its first opportunity to construe ...


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