{"id":95,"date":"2026-01-06T12:00:00","date_gmt":"2026-01-06T12:00:00","guid":{"rendered":"https:\/\/california.shuster.info\/?p=95"},"modified":"2026-01-06T12:00:00","modified_gmt":"2026-01-06T12:00:00","slug":"henggeler-v-dauod-g064064-ifpa-public-disclosure-bar","status":"publish","type":"post","link":"https:\/\/california.shuster.info\/?p=95","title":{"rendered":"People ex rel. Henggeler v. Dauod \u2014 Insurance-Fraud Qui Tam Suit Survives Public-Disclosure Bar Even When Based on Trial Testimony"},"content":{"rendered":"
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Case<\/dt>\n
People ex rel. Henggeler v. Dauod<\/dd>\n
Court<\/dt>\n
4th District Court of Appeal, Division Three<\/dd>\n
Date Decided<\/dt>\n
2026-01-06<\/dd>\n
Docket No.<\/dt>\n
G064064<\/dd>\n
Status<\/dt>\n
Reported \/ Citable<\/dd>\n
Topics<\/dt>\n
Insurance Frauds Prevention Act, Qui Tam, Public Disclosure Bar, Demurrer, Insurance Code section 1871.7<\/dd>\n<\/dl>\n<\/div>\n

Background<\/h2>\n

California’s Insurance Frauds Prevention Act (Insurance Code \u00a7 1871.7) authorizes private individuals \u2014 known as relators \u2014 to bring qui tam lawsuits on behalf of the state against people they believe have committed insurance fraud. Successful relators share in any monetary recovery.<\/p>\n

Jerilyn Henggeler filed a qui tam complaint alleging that Omar Dauod, his wife Gina, their attorney James Ballidis, and his law firm defrauded Geico Indemnity Company out of $22.9 million in connection with an underlying personal-injury jury verdict. Henggeler had read about the verdict in news coverage and incorporated trial testimony into her complaint.<\/p>\n

The defendants demurred, arguing the suit ran afoul of section 1871.7’s ‘public disclosure bar,’ which strips courts of jurisdiction when a qui tam action is based on previously disclosed allegations or transactions in a court proceeding, public report, or news media \u2014 unless the relator is an ‘original source.’ The trial court agreed, sustained the demurrers without leave to amend, and entered judgment for the defendants. Henggeler appealed.<\/p>\n

The Court’s Holding<\/h2>\n

The Court of Appeal reversed in part. As a matter of first impression, the court held that the public-disclosure bar applies only where the qui tam suit is based on publicly disclosed ‘allegations’ of fraud or specific fraudulent ‘transactions.’ It does not apply when the suit merely uses publicly available ‘information’ to support its allegations. Trial testimony \u2014 even if it later becomes the foundation of a fraud allegation \u2014 is information; it is not itself an allegation of fraud or a fraudulent transaction.<\/p>\n

Because Henggeler did no more than use publicly available trial testimony to construct her own fraud allegations, the public-disclosure bar did not strip the trial court of jurisdiction over her IFPA claim. The court grounded its reading in the legislative history and judicial gloss surrounding the IFPA and its closely related federal counterpart.<\/p>\n

The court did, however, affirm dismissal of three of Henggeler’s four causes of action that depended on workers’-compensation fraud allegations she had not adequately pled. Only the IFPA cause of action survives, and the case returns to the trial court for further proceedings on it.<\/p>\n

Key Takeaways<\/h2>\n