In the recent case of State of New Jersey v. Robert Goodwin, 224 N.J. 102, 129 A.3d 316 (N.J. 2016), the Supreme Court of New Jersey held that a person violates the insurance fraud statute, N.J.S.A. 2C:21-4.6(a), even if he or she does not succeed in duping an insurance carrier into paying a fraudulent claim. In doing so, the Supreme Court reinstated Robert Goodwin’s conviction for insurance fraud.

At trial, it was established that Goodwin and “Stacey” were involved in a romantic relationship since 2004 and living together in Newark, New Jersey. In April 2009, Stacey purchased an SUV for over $6,000, financed by Goodwin co-signing the loan. Insurance was procured from Progressive Insurance Company. Goodwin was the primary operator of the SUV.

While still in a relationship with Stacey, Goodwin secretly dated “Linda” who lived in an apartment located a few blocks away from Goodwin and Stacey’s apartment. On September 13, 2009, following an argument with Stacey, Goodwin drove the SUV to Linda’s apartment and parked it nearby. Linda’s trial testimony established that between 6:30 a.m. and 7:00 a.m. she and Goodwin walked to the SUV so that he could drive her to work. They found the vehicle severely damaged by fire. Goodwin then went to Stacey’s apartment and told Stacey that the SUV had been stolen and “burnt up.”

The Newark detective that had responded to the scene of the SUV fire earlier that morning observed its windows broken and that a screwdriver was used to tamper with the driver’s door lock. The ignition, however, was not damaged and the SUV’s anti-theft device prevented the operation of the vehicle without the ignition key. The detective concluded that whoever took the vehicle had the ignition key.

After his examination under oath, Goodwin admitted that he parked the SUV in the spot where it was found in flames and explained that he lied about parking the SUV in front of his apartment so that Stacey would not learn that he had been cheating on her. He denied that he had set the vehicle on fire. Progressive denied the claim based on Goodwin’s misrepresentation about the theft, and he was arrested.

Goodwin was convicted at trial of second-degree insurance fraud, but not guilty of arson and attempted theft. The Appellate Division vacated the jury’s verdict and held that Goodwin could not have been convicted of insurance fraud because he made no false statement of material fact affecting Progressive’s liability for the fire damage claim.

In reversing the Appellate Division, the New Jersey Supreme Court held that a defendant could be convicted of insurance fraud if the false statement is capable of influencing a reasonable examiner to pay a claim, even though the insurer ultimately denies the claim. In determining whether a statement is material, the court looked to the New Jersey Perjury Statute, which provides that a “falsification is material . . . if it could have affected the course or outcome of the proceeding or the disposition of the matter.” Significantly, the court stated:

The Legislature clearly did not intend for a person, who knowingly filed a false statement that could have reasonably affected the decision of an insurance carrier to pay a claim, to evade criminal prosecution merely because the carrier’s thorough investigation revealed the fraud before money passed hands. Id. at 115.

The Supreme Court explained that, going forward, the model charge to be used for explaining “material fact” under the insurance-fraud statute is as follows:

A statement of fact is material if it could have reasonably affected the decision by an insurance company to provide insurance coverage to a claimant or the decision . . . pay a claim. Id. at 115.

Finally, the Supreme Court held that in order to find the defendant guilty of knowingly making a false statement of material fact in seeking reimbursement on an insurance claim, the state did not have to obtain predicate convictions for the underlying charges of arson and theft by deception. The statements made by Goodwin concerning the theft of the SUV could have reasonably affected the decision by Progressive to pay the damage claim caused by the arson. Further, Progressive did not have to believe Goodwin’s account given to Investigator Goldman, that the reason for his lie was to cover up a romantic relationship. Progressive was entitled to infer that, once caught in a material lie, the remainder of his claims could not be believed.