Just a ClaimSmentor Moment #6- Update 3/09 on EA Renfroe/ Rigsby Whistleblower case-Possible Settlement

March 20, 2009


No time for blogging today but you won’t want to miss this blog over at Slabbed on settlement updates and court documents on the EARenfroe and Rigsby Whistleblower case. Slabbed thanks for updating this as many claims industry members are very interested in this topic. I’m hoping for EA Renfroe’s sake that this does settle. They sure did NOT deserve what the Rigby whistleblowers have put them through since Katrina. We have some old blogs here (just enter Rigsby in the search field to locate them. One of the Rigsby’s actually said in their deposition that EA Renfroe had done nothing wrong. More on that later:



This is an important case for adjusters to study from the stand point of Code of Conduct forms you are required to sign by carrier’s and what happens when you violate those code of conduct forms.

By all accounts I have ever heard from independent adjusters, EA Renfroe is an excellent adjusting firm to work for. I also managed their independents during my management career and found the same to be true. What a shame these whistleblowers put them through this when by their own admission their complaint was with the carrier.

State Farm Seeks Dismissal on Rigsby False Claim Act/KLG update/ Levee Break (Sher) decision including Overhead and Profit issues

April 9, 2008

It sure is difficult to get to work these past few days with all of the breaking claims news involving Katrina cases.

First we have developments with State Farm’s move to have the Rigsby Whistleblower (False Claim Act )case dismissed, the attorneys removed which actually comes as no surprise after the decision last week that the Katrina Litigation Group (KLG which picked up where SKG- Scruggs Katrina Group left off) could not represent the remaining policyholders on their pending claims nor could the Rigsby documents any longer be used. The surprising news which also should have been anticipated was that State Farm says they have filed a counter suit against them. If you missed the news last week which I didn’t have time to blog about on those actions- just view this topic and this carrier press release to catch up to speed on the court decision on the Rigsby’s and the KLG.

State Farm has released much information including information from the Rigsby’s depositions along with many court documents. Here is a link to their site with more documents than I’ve seen released on any of the blogs and forums thus far (thank you State Farm!):


I have to say that I am very pleased to see several of the insurance carriers posting their side of these stories/hot topics in the news with links to documents and their summary of the carrier position. Years ago when a staff manager, I found it very frustrating when you’d read bad press and could only speak “talking points”  and I often wondered why a carrier wouldn’t respond with more details than the very limited press releases. Things have changed post Katrina I feel sure due to today’s internet environment to include blogs,  forums, and in response to policyholder attorneys posting their side of the story on their websites. Their posts are most helpful to independents who have a very hard time locating information to keep up to date with developments on major hot claim topics and cases between assignments and this is going far to help educate us all rather than just reading bad press in non insurance related news articles, forums, and blogs.

One comment …. I hope the carriers do a better job at maintaining the archived stories on their websites rather than untimely removing them as MS AG Jim Hood did in December 2007 with his web redesign taking down many documents he had up against the carrier. If you missed it, here’s a news story that ran about his site taking down the documents( it’s by www.legalnewsline.com run Dec 2007). Leaves you to ask the question- why? I’ve heard folks guesses which include this was within weeks of Trent Lott’s retirement and the Scruggs indictments. Is there something he didn’t want us to view any longer? I have no idea but the timing is certainly interesting. Also- wasn’t it January 2008 (yes it was- here is a news story that ran when this happened at www.insurancejournal.com and here is a link to that story here when he reopened the criminal investigation against the carrier? Something he didn’t want them to be able to link to any longer? Again, no idea! In addition. many of the links in forum blogs that were connected to the Scruggs Katrina group no longer work since they have pulled that site down now making it frustrating I’m sure for folks trying to read through former blogs that contained links to any of those documents referred to in posts.

In addition to reading State Farm’s official website with all of the documents you could want to read, run over to Rossmiller’s insurance coverage blog here for great details and opinions from an Insurance carrier attorney point of view, over here to FOLO for more outstanding information. I particularly enjoyed the Folo comment on the release of an aircraft carrier group of court filings having grown up myself as a Navy brat with my dad serving on numerous aircraft carriers so it was quite easy to envision the author’s description. Once you view the State Farm link above and see all the documents- no doubt you’ll agree with the comparison! Finally, the Sun Herald has several news stories up on the topic to include a quote by a Rigsby attorney you’ll definitely not want to miss-here on page 2 of the story. There are links in the story to about 4 other stories they’ve done on the case as well.

Before I move on to the Sher case, I want to point out this comment on the State Farm press release “State Farm has filed a counterclaim against the Rigsbys seeking damages for their admitted, unauthorized, theft of information from State Farm, in violation of the federal Computer Fraud and Abuse Act.” I didn’t know what that act was so doing a search for more information, I found this article by a law firm out of FL which addresses it and shows the fines and the departments having a right to investigate the fraud and abuse: click here to view it. I am curious if the Rigsby’s did this with several attorneys present as the State Farm site info says, would those other participants also be held to this act? Would the Rigsby’s then have an action they can file against the folks that were there acting as their counsel who didn’t tell them about this act or what they were getting themselves in to? It looks like this allegation if upheld will lead to years of more news on these issues, possible fines and sentencing depending on the subsections violated if this located article is up to date. It looks like there is MUCH we still don’t know about what really happened and when (see blog discussions and court docs- did they first meet with Scruggs in Feb 06, Dec 05, Oct 05…when?)

The second major claims news story deals with the levee break decision in the Sher case. Many of the blogs are reporting on the decision but not commenting on a concern many of us in claims have regarding the decision on page 25 where the judge allows 25% for overhead and profit and 20% for basically unforeseen contingency damages due to “unopposed” testimony of the insureds expert. Page 25 also discusses comments about “water hammer” damage which after over 30 years in claims, I have not heard that term used from the claims side. Someone want to enlighten us on that? Going back to the overhead and profit issues and trying to figure out why Lafayette’s Insurance counsel  did not oppose the plaintiff expert testimony, I am curious if that was a calculated move due to the other overhead and profit suit I posted about (click here) on the 20% standard used for overhead and profit on insurance claims by most carriers? They may have just preferred to let this particular claim settle and then those decisions be addressed under the other suit which named numerous carriers. I’d have to go back and look at that to see if Lafayette was one of them but in any case, it would be strictly a guess only. I tried to find the volume referred to by the judge in the  Louisiana Office of State Facility Planning and Control and couldn’t find it on a google search but did find an instruction memo they did release about hurricane damage to state buildings here written in Sept 2005 after Rita and it sure doesn’t sound like they  were letting contractors by with just adding 20% for contingency damages and expenses when you read their comments about inspections on contractors estimates and inspections required on the progress on repair projects. Without being able to review the exact Volume referred to by the plaintiff’s expert as discussed by the judge in his decision, it sure is hard to understand what that has to do with insurance practices and general insurance claim settlement standards isn’t it? You will find the entire decision ruling on the validity of the  flood policy exclusion language on the Sher case here at Rossmiller’s blog on the Sher decision as well as his supplemental blog adding more information found here.

All input appreciated on these cases and the overhead and profit issues addressed by the Sher decision. Just reply below.

Cori Rigsby January 2008 Deposition- Hoped to Remain Anonymous -Let’s Compare

March 29, 2008

Attorney David Rossmiller  has posted a newer January 2008 deposition for Cori Rigsby taken after her loss of income from the Katrina Scruggs Group (now Katrina Litigation Group).

This should provide interesting weekend reading and comparision to an earlier deposition we’d posted taken in November prior to Scruggs indictment and all the events which have taken place. At the time of the earlier deposition, they were still being paid going into their second year.

I’ll post any interesting comparisons between the two if there are any major discrepancies between the two. See Rossmiller’s 3/28/2008 post (click here) for his comments regarding her January 08 testimony that she hoped to remain anonymous (hard to believe when her earlier deposition said she reported it to State Farm the day after the data dump weekend…also consider the number of associates they brought in to help with the data dump weekend). Here is a link to our prior blog on Rigsby’s earlier deposition if you want to read both for yourself to compare the two. Wouldn’t it be great to have a copy of ALL of the depositions they both have given (Kerri and Cori) and compare the details of ALL of the depositions? I’d volunteer my time to compare them all if anyone has links to all of them for viewing. There remains a big question as I believe Rossmiller points out as to when they began their relationship with Scruggs- December 2005 or February 2006 as they testified to although this differs with other info available. That would be a major development if they pin down the fact they have provided inaccurate information on the initial meeting dates as many suspect (two additional months of their access to files and documenting their allegations?)

So what do you think about this more current deposition? As an adjuster or adjusting firm, are you glad to see these whistleblowing sisters have lost their income they were getting at a time that many experienced claim adjusters and managers were without income after no major storms in 06/07 while the Rigsby’s were drawing 150K for little to no work as they testified to in earlier depositions? Do you agree or disagree with Rossmiller’s guess that the Rigsby’s careers are “radioactive” in the independent adjusting or staff adjusting/management field? How about as public adjusters should they make a decision to flip if they cannot get employment again on the independent/staff side of claims?

Dickie Scruggs- Navy Fighter Pilot? Carl Horowitz article about Scruggs Career Up in Smoke

March 29, 2008

I ran across this article today by Carl Horowitz- very colorful by the way- summarizing the Dickie Scruggs saga and fall from grace. It’s an excellent detailed summary. I was very disappointed to read about his history as a Naval fighter pilot which I wasn’t aware of. I’m curious if anyone knows if he did 20 years in the Navy and if so if his military retirement and medical benefits would be jeopardized by the felony he’s pled guilty to? This article was written pre- son Zach Scruggs pleading guilty in the case but is still an outstanding summary of major litigation in the Scruggs law firm history.

Many of you who are members over at ClaimSmentor know that this mentoring project was started and dedicated in honor and memory of my mentor and best friend, my dad who served proudly for 35 years in the Navy as an aviation maintenance officer- AIMD- and I hate to think that anyone with a similar background and training could have done what Scruggs has plead guilty to. Here’s a link to the ClaimSmentor ABOUT US  page dedicating the project in my father’s honor if you aren’t aware of that.

Please comment if you know more about the number of years Scruggs served in the Navy and if it was 20 years if his retirement would be withheld as a result of this conviction (the loss of the income would be minor to Scruggs I’m sure but it’s the honor of it all I’m curious about). I’ve read alot about his history as discussed in this article with Presidential candidate John McCain and wonder now if they met while serving in the Navy.

Rigsby Whistleblower RICO case- Motion to Dismiss 3 of Insurance Carriers to Focus on State Farm

March 6, 2008

There have been more news stories and blogs covering all of the recent legal activity and investigations on Scruggs to the point it is impossible to keep up with blogging about them but I am still updating information on the Kerri Rigsby and Cori Rigsby whistleblower cases due to the high interest expressed in the activities on those claims and their actions.

We have viewed new articles alleging that the Rigsby’s in the RICO lawsuit alleging wrongdoing by multiple carriers has had new filings to drop carriers other than State Farm in RICO allegations/suit.

To find the updates on this new development, click on the links below:

Sun Herald March 5, 2008 story: click here

David Rossmiller at the Insurance Coverage blog 3/6/08 explains it all with humorous comments: click here 

Folo blog provides more info on the case and a good explanation of qui tam terms if you aren’t familiar with them: Click here

More on this case to follow along with the link on our prior blogs. This is an outstanding case for even new adjusters to follow as there are links to numerous adjuster file documents you can view to see real file samples. It’s been an excellent teaching tool for file samples for training new adjusters.

Adjusters interested in this whistleblower story may also be interested in viewing numerous documents about the 2006/2007 activity on the old OK tornado cases (1999) where State Farm executives were deposed and provided testimony in 06. The opposing counsel has posted all of their depositions which are quite interesting reading as they question their executives on Katrina claim issues. Especially take time to read the deposition of their Claim VP Susan Hood regarding use of independents and Haag Engineering. Here’s the link to that firm’s postings with the deposition links: Click here. She comments on the claim manager pleading the 5th and other interesting information to hear the carriers position on the Katrina claim file handling. I found it fascinating but will let you read it for yourself.

We’ll talk more about those links when I’ve completed reviewing them all myself and I will post additional information on the new dismissal motion as it becomes available.

Update 3:25 pm CST 3/6:

New Sun Herald story saying the 3 carriers they are asking to dismiss are Allstate, Nationwide, and USAA. Click here for the story

State Farm Vs Hood- Part III/ Hood/ Rigsby commendation?- An interesting news alert today?

February 23, 2008

You just never know what you’ll get with a news alert and here’s an interesting one received on the Rigsby’s today:

Google Web Alert for: Kerri Rigsby

SC 574 (As Introduced) – 2007 Regular Session
WHEREAS, Hood’s efforts were aided by Cori and Kerri Rigsby, two sisters from Ocean Springs, Mississippi, who worked for a State Farm contractor that

Here’s what it linked to which was quite surprising to see that Senators Dawkins and Williamson presented this Senate Concurrent Resolution 574 in 2007:

MISSISSIPPI LEGISLATURE2007 Regular SessionTo: RulesBy: Senator(s) Dawkins, Williamson

Senate Concurrent Resolution 574


     WHEREAS, on Monday, August 29, 2005, Hurricane Katrina, originally designated a Category Four Hurricane, crashed with unrelenting and violent force onto the entire Mississippi Gulf Coast, making landfall at or around Waveland, Mississippi.  In one day, the worst natural disaster in our state’s history struck us a grievous blow, leaving a 90-mile swath of destruction along the Mississippi Gulf Coast and causing severe damage throughout Central and North Mississippi; and

     WHEREAS, after the damage from the hurricane was assessed, there were numerous disputes surrounding insurance claims or allocating wind damage and water damage, where the insurance industry denied homeowners and business property coverage; and

     WHEREAS, Mississippi suffered its greatest damage from Hurricane Katrina in sections of coastal communities where some residents were equipped to fight back.  Senator Trent Lott and Congressman Gene Taylor were among the plaintiffs and urged Congress to repeal insurers’ federal anti-trust exemption and investigate their post-storm claims practices before a national audience.  Mississippi’s legal system also allowed plaintiff’s attorneys to threaten punitive damages, and allowed the state’s Attorney General Jim Hood to hire extra lawyers on contingency to press his criminal investigation; and

     WHEREAS, in Mississippi, Attorney General Jim Hood opened a grand jury criminal investigation into insurers’ claims handling practices just a few weeks after the storm.  His probe focused on the wind-versus-flood debate in which some property owners were denied homeowners insurance payouts because insurers chalked the damage up to flood, which is covered by a separate policy that often pays out less; and

     WHEREAS, Hood’s efforts were aided by Cori and Kerri Rigsby, two sisters from Ocean Springs, Mississippi, who worked for a State Farm contractor that managed teams of adjusters.  The “whistle-blowers” left their employment with 150,000 pages of documents that they say shows that State Farm defrauded policyholders by manipulating engineering reports to deny claims.  The Rigsby’s turned them over to private attorneys, the Attorney General and Dunn Lampton, the U.S. Attorney in Mississippi; and

     WHEREAS, using the engineering information suggested by Cori and Kerri Rigsby, Attorney General Jim Hood has obtained concessions from State Farm Fire and Casualty Company regarding how it will handle policyholder claims resolved through an historic settlement agreement.  Attorney General Hood has dropped the civil lawsuit against State Farm in his quest to seek full payment of Katrina claims from insurers, but the lawsuit still stands against Mississippi Farm Bureau Insurance, Allstate Property and Casualty Insurance Company, and United Services Automobile Association; and

     WHEREAS, the result was a well-coordinated assault in Mississippi, as compared to homeowners in Louisiana who were left to their own devices advocates say.  There was no high-ranking enforcement official investigating the insurance industry as in Mississippi; and

     WHEREAS, especially where many of the victims are low-income groups, the leadership of elected officials and employees such as Cori and Kerri who are willing to testify really matters, and we recognize these efforts on behalf of the citizens of our state:

     NOW, THEREFORE, BE IT RESOLVED BY THE SENATE OF THE STATE OF MISSISSIPPI, THE HOUSE OF REPRESENTATIVES CONCURRING THEREIN, That we do hereby commend the actions of Cori and Kerri Rigsby from Ocean Springs, Mississippi, for their assistance in the investigation and subsequent lawsuits against the insurance industry for failure to pay claims for property damage caused by Hurricane Katrina.

     BE IT FURTHER RESOLVED, That this resolution be presented to Cori and Kerri Rigsby and Attorney General Jim Hood and be made available to the Capitol Press Corps.


Doing further research to see if I could find more on this proposed resolution presented, I found this wikipedia report that says in part:


In February 2007, Mississippi state senators Dawkins and Williamson submitted a resolution, Mississippi Senate Concurrent Resolution 574, ,to the state legislature commending the Rigsby sisters for their actions. The resolution died in committee and the Rigsbys garnered no formal recognition by the legislature.


If you don’t know how Wikipedia works, here is a link explaining how information is added. Note also here that someone has contested the information in March and June 07 mentioning charges are pending involving the documents and asking that the Wikipedia info be deleted. If you think it should too- maybe you should add your comments as well! There are links to all types of documents on the Wikipedia info on the Rigsby’s if you haven’t already seen it before. Here’s the link once more. Make sure to note the top comments about “the neutrality of this article is disputed”. Not sure what that means but atleast it’s being disputed.

Some interesting observations- 150,000 pages of documents? Haven’t all the news and litigation documents indicated 15,000 pages? What happened to the other suits against Farm Bureau, USAA, and Allstate which we don’t hear anything about in the news? Two senators praising the Rigsby’s for stealing documents? I’m at a loss for words after reading this. Any comments? I hope State Farm  and/or EA Renfroe Adjusting firm has seen this document…if not, pass it on to someone there if you know some folks who might be interested!

If you missed State Farm Vs Hood Part I and II blogs, just click here and here.


The blogs and news stories have been actively discussing issues related to AG Hood and donations promised from the five million dollar settlement State Farm made in Jan 07 that you’ll find quite interesting. First- here is the Sun Herald news story. This blog entry over at www.Statenewsshot.com ties the donations to AG Mike Moore (lots of ties to Scruggs ongoing discussions) and the Cal Ripken Foundation($200,000 donation) as well as Morgan Shands who ran Hood’s first campaign for AG in 2003 and the $800,000 donation to the Boys and Girls Club of MS. For lots of other current discussions, view blog entries over at Yall Politics and Folo.

Update on the Rigsby / EA Renfroe Whistleblower case- Will the KLG get dismissed on cases? Link to Cori Rigsby’s deposition

January 11, 2008

I promised earlier this week to get to an update on the Rigsby whistleblower case where a whirlwind of litigation is being filed to remove and substitute attorneys on some of the cases. It is mind boggling what is going on with these Katrina cases. Much of the activity is on the MacIntosh case. I have been trying to keep up with all of the court filings via google alerts but they are coming out so fast and furious I have decided its virtually impossible with limited time for blogging while attempting to keep up with ClaimSmentor classes and staffing needs. Thus, for excellent updates regarding the Scruggs bribery indictment activity and all of the motions being filed to dismiss, disengage and substitute attorneys representing many in the group, I would defer you to outstanding blogs at The Insurance Coverage Blog  for daily updates by Attorney David Rossmiller who seems to have a great handle on the issue and some often interesting commentaryover at another blog at www.folo.wordpress.com on this also. Wall Street Journal even got in the act this past week and here’s a link to their recent blog commentary on the attorney musical chairs and possible future additional indictments,etc found at: http://blogs.wsj.com/law/2008/01/10/report-monday-to-be-big-day-in-laffaire-scruggs/.

I’m going to concentrate my attention to the activities actually involving the claims folks that I can find in the news. There is so much of that is being reported on blogs and forums but not with much detail from the claim side of things where I am the  most concerned and have the most understanding as a former claim manager. That is what I have been wanting to know- how their data dump weekend could ever have been done under a good claim manager’s watchful eye. Well, rather than throw too many links at you, I’m going to try to limit this update to two of the most important things that explained the situation to me and I think will help you also understand what is alleged to have happened on this case. First, we’ll go over the November 2007 deposition we found a link to from Cori Rigsby’s deposition then a January 4, 2008 court document filed by an attorney for EA Renfroe which is an outstanding detailed chronological list of what has happened here in their opinion. I think that is much better than guessing at the facts. They are the parties involved and these two documents are from their statements and records.

You might want to print out these links if you are truly interested in knowing their sides of the story as the deposition I believe was 127 pages and the document filed 1/4/08 with the court is 36 pages. There are so many other links we have to other stories popping up in the news but these two provide the best total summaries from beginning to this point that I have found.

Here’s the link to Cori’s deposition : http://www.insurancecoverageblog.com/McIntosh,%20November%2019%20Cori%20Rigsby%20deposition.pdf

I’d like to read one of Kerri Rigsby’s also but have yet to find an online link to one. Cori’s linked to above was taken in November 2007 as she is deposed by an attorney for State Farm first then an attorney for EA Renfroe. She outlines the timeline of events from her  first concern about “irregularities” within 2 weeks of arriving on assignment for Katrina all the way through some current information she is asked about as to how many hours per week they are working on the cases with the Scruggs (now Katrina Litigation Group_renamed from the Scruggs Katrina group) which you will see is very little. The deposition answers the question if they are still being paid which she states they are- that their verbal agreement is for $150K at over 6K biweekly since July 1, 2006 and she says when July 2007 rolled around they have continued to receive these funds. She also indicates all of their attorney fees are being covered by Scruggs so they have no worries there either. This salary is a hard pill to swallow for most adjusters who are out of work as carriers use more staff than independents plus the lack of hurricanes the past two years. More about that when you get to the EA Renfroe recent court document. There are many other things you will want to read in her deposition to form your own opinion about the Breach of Contract and violation of Confidentiality agreements such as the fact they actually began copying documents as far back as October 2005, had off site meetings with Scruggs and others involved with the documents where they brought their carrier issued laptop to meetings offsite while still working for EA Renfroe and State Farm and shared info on the system, where she emailed carrier documents to Zach Scruggs, and some really damaging information about an affair her sister had with a State Farm manager which I think most would agree is against carrier policies (sexual harassment policies and the person named in her testimony she says was a State Farm manager I think during Ivan that they worked with) for staff and for independent managers. I’ll provide a link to some motions just about that issue shortly. She admits the data dump weekend took place off carrier or adjusting firm premises with their(CARRIER) laptops being used with friends to run a list of documents they turned over to the AG and US Attorneys office the very next morning. There is so much information in the deposition you just need to read it yourself as it is hard to keep the entire story committed to memory. She does admit that they NEVER gave EA Renfroe any notice of their concerns of irregularity on the engineer reports alleging they were trying to “protect” them from involvement in the data dump weekend. Gee- what a favor- now they’ve been subject to untold number of cases with litigation you’ll see in the next document. It is particularly amazing to me the testimony about Glamour magazine running them in a story I believe it was in June 2007 as heroes. Read it for yourself. Heroes of what sort? I have not tried to link yet to that magazine issue. She also admits that she tried to make no contact with the Renfroes until right before the 20/20 news story ran. I could go on and on about the things stated in this deposition but I”ll leave that for now and you can read it for yourself on the link above. The reasons given for not telling them and their interpretation of violating their code of conduct make no sense to me but read her reasons and you decide as an adjuster. Other interesting information covered is that she tried to access her mom’s claim, Trent Lott’s claim,etc and that the carrier apparently must have had tracking records on that as they asked about numerous dates that they tried to access records on files under her alias id. It makes no sense also the statement that all files they copied they allege they took off a pirated copy of the carriers Engineer Roster assignment list yet there seems to be some implication in the questions during her deposition that they seem to align right up with a list of insureds involved in the MacFarland case I think it was (it’s mentioned in the depo questions). So did they really use the Engineer assignment list or was there more to it than that such as having been given a list from another case? I don’t know for sure what the questions meant.

Before I move on- here’s the link to a news story this week about legal activity taking place about the alleged affair. I hope adjusters reading this will take your ethics seriously and stay away from such activities with other storm members on cat at your adjusting firm or carrier level. I don’t know of any carriers that condone relationships between independents and staff as most hold very high standards for staff and independent managers to comply with sexual harassment policies. I don’t know what rules were for them on this cat but you can clearly see that it won’t remain a private affair if litigation as ugly as this whole thing  takes place so why even take the chance:


This article is about other issues concerning the insureds desire that info on the bribery not come out in their case but here is the excerpt about the affair in the last paragraph of the article:

“The couple’s attorneys also asked Senter to block jurors from hearing any testimony that Kerri Rigsby had romantic relationships with a State Farm employee and with a co-worker who also helped State Farm adjust Katrina claims.”

Next is the important court document filed January 4, 2008 by an attorney for EA Renfroe. Here is the link:


You need to also read this 36 or so page document filed requesting dismissal of the rest of the Katrina Litigation group due to the payment of fees to the Rigsby’s when they are potential witnesses and due to the bribery charges. Most interesting in this document is that it takes you through the entire situation and shows you the reasons they think they should be removed from the case. The retaliation (if it is that as Renfroe’s attorney alleges) based on motions to add them to hundreds of cases is a real nightmare. It makes you even more disgusted with the reasons given by Cori in her deposition as to why she didn’t tell the Renfroes especially when she has testified she didn’t initially think the Renfroes had done anything wrong  only that they failed to tell them as they didn’t think they could influence the carrier decision (see deposition testimony for exact comments made). There was a 1/4/08 article at www.chron.com saying the carrier also wanted them dismissed but I can’t get the link to work today.

I have a few if not many questions. First don’t you find it strange that the Merlin Law Group calls their group the Katrina Lawyers group – here’s their site then the Scruggs group who continues to use the Scruggs Katrina Group website according to footnotes in the EA Renfroe document but now has changed their group name for the remaining partners to Katrina Litigation Group. Geez- is that confusing or what? I’d be curious how the Merlin group feels about that. They(Katrina Lawyers- Merlin’s group) also recently settled something like 22 cases with this carrier according to news articles. Here is a link to one of them and to the Katrina Group’s website:



Merlin’s site interestingly enough has posted a link to my adjuster information blog here. I had read about them as they were part of the reports to the Citizens FL Task force committee and Chip Merlin was very upfront with them giving them heads up information about problems they experienced with claims handing and recommendations for improvement to the task force. Their site at the Merlin main website also has an interesting article I’ve linked to for training about Bad Faith as I was very interested in his comments about carrier requirements to train their adjusters. Anyway- getting off topic there but Katrina Lawyers and Katrina Litigation Group as the leftover Scruggs group is called can become very confusing!

So what is next? More twists and turns no doubt. Again as with everything about this case…it leaves you with more questions than answers. The very sad part is where are the insureds left on this with the changes in lawyers, law firms,etc. I cannot even begin to imagine what they are going through and who will ultimately pay all of attorney fee bills generated by such magnatude of activity. The same goes for the EA Renfroe group. I previously posted a link to Jana Renfroe’s Deposition in a recent blog where she testified at the point of that deposition that they’d already incurred approximately half a million in legal fees. Unbelievable and unfair to a firm who even the Rigsby’s admits did nothing wrong with the engineer reorts. Read on in her deposition how they went to the State Farm manager to “see her reaction” back I think in Sept 05 or some such comments and how late in the game they put the manager’s carrier boss on notice in June 06- AFTER they had already had their data dump weekend. No chance given for anyone to look into the alleged “irregularities” yet the carrier and adjusting firm have quite a nightmare on their hands trying to straighten this out. If someone was truly trying to protect policyholders as she says they were trying to do, why would they continue to work there and “collect” documents from October 2005- June 2006 and not try to report it to someone at the carrier or adjusting firm to investigate what happened versus saying nothing? I sure can’t figure it out. They only left their assignment in June 2006 AFTER they mass copied the documents in June and went on Scruggs payroll allegedly in July 2006. Did you also know she had a Scruggs cellphone for a period of time yet doesn’t know the number but if I recall correctly her mother is one of the folks who called her on the number. Another interesting development is she alleges her hard drive or computer broke along the way and she cannot retrieve any email documents they were asking to be produced if I read it correctly.

If you never read it, go back and read my blog on “Will someone lose the infamous sticky note”. Here is a link. You’ll see it has come up quite a bit again in recent weeks- even in the link to the 1/4/08 document where it says that Scruggs says the originals were given to him (Cori ‘s deposition says she only saw the engineer’s report with the yellow sticky ..ie..a copy)…I point this out again as a reminder that the only place for file activity notes is in the file- in the activity log- not on yellow sticky notes. That one note has created lots of doubt and insinuation on Katrina cases and even made it to ABC news and I think it was even several blogs…all for something so simply avoided by just doing the right thing and posting it on a blog. That is adjuster 101 training not something that ever should of come up by an experienced person handling a file.

From the claim side of things, another interesting thing that came out in Cori’s deposition was the fact due to space shortage that the staff were in one office and the independents had seperate office trailers by firm from the cat flood and wind offices. Maybe we should all learn from this and not segregate the independent and staff adjusters and managers they report to so they can have an opportunity to be more observant. I’d also be very leary of handing out company laptops to folks to take off site after the meetings these whistleblowers had offsite. I know the reality that it is virtually impossible not to do so as they use the systems for estimates in the field,etc when the carrier provides the laptops and access to their systems. So what is the answer? Carriers think it is no longer using independents but what would prevent an employee from doing the same thing (other than loss of salary and benefits of course!). Many experienced managers and adjusters think that this will lead to more limited assignments for independents where they may farm out the inspection and have inside adjusters enter the scope and handle all other aspects of the claim so there wouldnt be a need for independents to access forms and endorsements or have system needs to access data and they can simply go through a staff adjuster for anything they need to reduce the exposure to the carrier systems.

I hear the problem from both sides, carriers staffing up as they don’t want to take chances on independents and really who can blame them after this fiasco BUT that isn’t the answer. Independents will always be necessary on major storms like Katrina. By carriers avoiding their use due to a small percentage of poor independents, they are avoiding the opportunity for training with independents so they can properly handle claims. Listen folks, the independents aren’t happy about what poor performing independents are doing to their potential to work. We are all in this together to properly serve the policyholders, we just need to work harder at making the relationship work and to protect policyholder confidential information. Everything in the news is far from anyone’s intentions but the entire stories are feeding upon each other and we are all trying to understand what happened here as others like me find this all beyond our wildest imagination in a normally routine claims industry.

 I hope one day to find links to other depositions such as for those from the carrier side (although many news reports claim the 5th was plead by some carrier folks) to see what they have to say. Suffice it right now with a copy of this link to a recent filing by the Carrier for a request for documents they want to see on communications with everyone involved. You’ll recognize many of the names from Cori’s deposition:

Here is the order where the carrier requested the Rigsby’s phone records (I’ve got a link to a similar request also for their email records in another link) and Judge’s order on it:


Here’s a link to another Sunherald document on the State Farm request for production of a very large number of documents and communications between parties who have been involved in this:


I’ll continue to provide updates as more develops involving the carrier, the adjusting firm, or the adjusters or managers but will leave all the attorney musical chairs and indictment information up to those who understand those aspects of these cases better. For now I’ll leave you with this last link ( I knew it would be hard to limit this to 2 links!) which discusses the new attorney’s request for a one month delay and discussing the new order for Scrugg’s deposition to ferret out the relationships due to the fact the Rigsby’s were witnesses and employees and questions as to privileged or not documents:


Here’s links to our prior blogs here on the topics mentioned above:

Jana Renfroe’s Deposition: http://dimechimes.wordpress.com/2007/12/18/renfroes-deposition-in-the-rigsby-whistleblower-case-interesting-look-into-their-thoughts-on-the-case/

Another blog on “Just when you think things couldn’t get worse”:


New Developments on these cases


Scruggs Contempt case (3 of 3 blogs):


Special Prosecutors on the case:


Will someone lose the infamous sticky note blog:


Renfroe’s deposition in the Rigsby Whistleblower case-Interesting look into their thoughts on the case

December 18, 2007

You never know what your going to run across on different claim issues we like to follow in the claims industry. Today was one of those days that a follow up on the Renfroe / Rigsby whistleblower case lead me in a direction not expected on a Scruggs firm link to a deposition given by Jana Renfroe of the EA Renfroe firm which was given to the Rigsby attorney in March of 2007. It was hours worth of interesting reading not just from a human interest story in this major case with the players involved but from a management perspective which I felt could be a very useful training tool  as many issues came up in the form of questions that managers and owners of adjusting firms need to have a good handle on regarding employment, performance records they maintain on personnel, training records, all communications, and in maintaining all  deployment records with carriers.

I post about this deposition as it provides very useful and interesting insights into things claim managers need to be prepared to provide deposition testimony about should the need ever arise as has often happened in the aftermath of Katrina. The questions asked in the deposition of the EA Renfroe owners are things all managers should be prepared to answer should they be deposed on similar cases. The purpose of this particular deposition was made clear in the statements by the Renfroe’s attorney to Mr Hawley, the attorney representing the the Rigsbys. The deposition was taken in March of 2007 regarding the breach of contract allegations on the Renfroe / Rigsby contract. When Attorney Hawley (Rigsbys attorney) tried to bring in the issues of the wind vs water claim calls, objections were raised. I was surprised the attorney even tried to broach those topics with Mrs Renfroe as she testified in her deposition she was not an adjuster but had traveled with husband Gene in their early years prior to having children. I was most impressed with the fact that she had obtained her MBA and I  thought she made a credible witness on her own behalf  in the deposition as I read it.( I have to admit it would have been very interesting watch in person after doing kinesic interview technique training in my early years as an adjuster). I was a bit surprised at her lack of knowledge regarding more particulars on contacts at the carrier level and IDL certification specifics as the owner of the firm but her role was more financial and personnel related. I very much liked comments she made in her deposition regarding their desire to be “partners” with their independents and their wish that the Rigsbys had notified them of their concerns with what the Rigsbys felt were “irregularities” so they could have had the opportunity to investigate their allegations as they would with other concerns raised with carrier staff or independent personnel they deploy.

I have  wondered what the Renfroe’s position was on the Rigsby whistleblower case as I’m sure many of you have (they are owners of EA Renfroe who the Rigsbys worked for).

Today’s google alert sent an interesting link to this information on the
Scrugg’s site and I happened to click onto the link they had to Jana Renfroe’s
deposition taken in March 2007. It took hours to read to comprehend everything
but was a good learning tool as to things an adjusting firm or manager should
think about regarding contracts, regarding having a 1-800 hotline established
for your adjusters to report suspected fraud or wrong doing, and to consider how
your firm is going to look when being deposed on training requirements your firm
has, documents you maintain to keep up with those training achievements,
deployment selections, and how you track performance evaluations for your
independents. Of much interest is the comment on the last page of the deposition
by Jana Renfroe on page 94 when asked what she thought of the allegations made
by the Rigsby’s and her indication that “she didn’t know what to believe”.  
I’ll outline other allegations. Note on about page 80 where she testifies in her
deposition that thus far the attorney fees on the case have been about half a
million dollars….unreal! Also interesting her testimony that there is not a
joint litigation effort between Renfroe and State Farm on these issues. I’d been
wondering about that. 


Here’s the Scruggs webpage:


Note- that the link above also has links to the AOL subpeona’s for the
Rigsbys personal email accounts ( I bet they hate having those email addresses

Here’s the link to the subpeona on the Rigsbys AOL email:(watch what you say
even on your personal email!)

XXXXXX-link discard 3/09- Scruggs site down since he went to prison and no longer works.


Link to Jana Renfroe’s deposition: (from above link)-link removed 3/09 as Scruggs site down

If you missed it, here was the original complaint against the Rigsbys by EA
Renfroe: (I’ll see if slabbed has this-the Scruggs site is down)

Here is some of the more interesting information summarized from the 94 pages of the
deposition (see numbers on bottom right of each page- each page has a number
(1-94) for whole page and each page of the transcript is like 4 pages reading
1-372 but I refer to the number 1-94 for the whole page in most cases.

It is very interesting reading this entire deposition to get a history on EA
Renfroe’s beginnings in the mid 90’s. Gene had been a long term adjuster/manager
with Crawford prior to opening their own firm in 94 or 95 in Atlanta. Many of
the early members and managers came from Crawford. Most impressive is that while
Jana has no adjusting background herself, she did travel with Gene prior to
having a child and later completed her degree as well as her MBA before they
opened EA Renfroe. The deposition is a who’s who of managers and “liasons” at
Renfroe and State Farm that they dealt with. These are some of the pages I
personally found most interesting, possibly given my State Farm background in
claims for 28 years to include catastrophe management:

 The first page of the deposition which was being taken by defendent Moran and Rigsby’s attorney, Mr
Hawley shows that Cori and Kerri as well as Gene Renfroe were present during Mrs
Renfroe’s deposition(thus the comment about kinesic interview observations). Note that the Renfroes’ attorney objected to any line of questioning during the deposition that could have been part of discovery on the
wind vs water issues and wanted the questions limited to questions about breach
of the employment contract so you’ll read many objections by the Renfroe’s
attorney during the course of the deposition.

Page 29 (pages 113-116)- How they hire- Ms Renfroe said they prefer offering employment to
retired military as a second career and other recruiting is done through word of
mouth via referrals from other adjusters. (Glad to see confirmed my assessment
that some of the major carrier independent players don’t solicit new employees
through advertisements but rely on their reputation thus many good adjusters are
left out of the mix leaving carriers with impression that there are no adjusters
available when a particular adjusting firm they use runs out of core players). On various other pages throughout the deposition they discuss their number of independents and state they originally had 100-150 and have grown to
about 1200. The testimony says they deactivate about 150 adjusters per year and
that over the course of time they have serviced State Farm claims since the mid
90’s they have had about 100 requests to deactivate an adjuster over performance
issues. Also somewhere in the report it indicates they sent about 300 adjusters
to Katrina and about 20 managers. I was surprised as I expected the numbers to
be much greater on the Katrina assignments.

Page 34 begins a history of their State Farm work and initial contacts with Dan
Kerrigan ( he used to handle all independent assignments). It is interesting
reading this section and seeing there isn’t more formal “courting” of this
client and that they deal with section managers and team managers on various
assignments with very little interaction as far as yearly meetings,etc…

Page 37- very interesting comments on Sales calls by Don Goodin of Renfroe for
non cat work in Atlanta, Chicago, and Arkansas where they can pick up non cat
assignments as being some of their only sales calls on the carrier.

Page 37- mentions some of the conventions they meet with carrier such as PLRB
and possibly windstorm conference,etc

Page 48- Comment that they sent about 300 adjusters to Katrina

Page 49- see their deployment criteria- primarily qualifications then seniority
then availability is the order they used

Page 52- Begins info on Rigsbys position as liasons on the State Farm Katrina
work. Also discusses beginning here the names of the State Farm section managers
and team managers involved.

Page 53- comment that they sent 20 or so liason managers were sent by Renfroe to
Katrina work for State Farm. Discusses who from Renfroe reported to Lecki King
(she is the one Scruggs group posted the photo of pleading the 5th during her depo on engineer firm questions)

Page 54- Starts discussing the employment contract Rigsbys signed with EA

Page 59- I found this strange- the Rigsbys attorney asking Jana Renfroe
adjustment questions on wind vs water when it is established somewhere in the
deposition that she had not been an adjuster yet he was trying to pin her down
on wind vs water coverage issues. She is not licensed adjuster and should not
have been making those coverage decisions anyway but the attorney didn’t seem to
be getting the point.

Page 62-63- See discussions on Code of Conduct report and what procedures they
had set up in their firm for adjusters such as Rigsby’s to report fraud or other
problems to the firm

Page 64- VIP- see reasons they are NOW setting up a 1-800 hotline they indicate
will be monitored by a 3rd party for adjusters to report wrongdoing to avoid any
further “excuses” by adjusters for not feeling comfortable to report wrong doing
by the carrier personnel or other independents

Page 65- Hawley wants to know how the Renfroe’s would have investigated the
allegations had the Rigsby’s ever reported it to them prior to reporting to
outsiders (note that in various places in the deposition they ask how they
handled investigations of performance issues of their independents or of a
carriers wrongdoing)

Page 71- A discussion of EA Renfroe’s connection with Haag Engineering (see
interesting comment on page 72 also alleging State Farm says they will use Haag
Engineering again)

Page 73- starts discussion of the “data dump” weekend and what knowledge Renfroe
had about it. Important note about what they didn’t know- all Rigsby would tell
Renfroe’s Don Goodin is that they couldn’t talk to them and that it wasn’t about
Renfroe but it was about what State Farm had done to them. This page also goes
on with the testimony about how Renfroe found out about the Rigsby’s from State
Farm but again were not told what they’d done but that they were being suspended
WITH PAY (my comment- unreal SF would pay them on daily management rate while
they were suspended but later in the testimony that say that one of the Rigsby’s
went out on stress leave and one said she terminated assignment so neither ended
up on the paid suspension apparently from this testimony in the depo of Jana

Page 76- Says Cori called Mrs Renfroe in August to talk although they didn’t
complete the discussion as Mrs Renfroe ended the conversation at that time

Page 77- Says they didn’t know what was going on since Cori didn’t tell them and
State Farm Section mgr Dave Randall refused to tell them. They say it was when
their employees were first getting criminal investigation request for records
that they first started to have any idea what was going on yet they didn’t
pursue any additional facts from State Farm since Section Mgr Dave Randall told them he
couldnt tell them anything else other than that the Rigsby’s were to be

Page 78- Renfroes’ first learn finally in August 06 (2 months after Rigsby’s
suspended) about the Sun Herald articles and about the 20/20 show as Rigsby’s
husband Paul Moran notified them of the articles ( Can you imagine the position
he must have been in? He is now divorced from Rigsby). Here she goes on to
explain in response to deposition question what rold Cori and Kerri played about
going to the attorney

Page 79-talks about the call from State Farm and the suspension issue again. Mrs Renfroe
comments she was “shocked and hurt” after watching the 20/20 program.

Page 80- Jana Renfroe admits it was “pretty quickly” after the 20/20 show that
SHE made the decision to sue the Rigsby’s “to defend our contracts and integrity
of our contracts”.. Interesting also is her comment that the Rigsby’s were “long
time trusted employees” (my comment-ouch – hmmmmmmmm what effect would that comment have on
future developments in the case?).

Page 81-Continues on page 81 about the Breach of the employment contract and Mrs
Renfroe’s belief the first breach occurred when the Rigsby’s didn’t come to Mr
and Mrs Renfroe to report the problem

Page 82- interesting questions and answers about the breach not involving fact
that they participated in criminal investigation- only the fact they never notified
them of the problem. Somewhere else in depo it says they wanted to be part of
the solution – not left out of the info until they went public.

Page 83- Rigsby’s attorney refers to State Farm as a “sacred cow”

Page 84- Jana refers to fact Rigsby’s had worked State Farm claim for 8 years and no prior
complaints and finding the alleged “irregularities” strange,etc

Page 85- In response to questions about what internal investigations they
conducted after they knew with other adjusters they say none because they didn’t
want to interfere with the ongoing criminal investigations

Page 86- Jana Renfroe says no one at Renfroe consulted with anyone one at State
Farm concerning filing the suit against Rigsby’s ( interesting as I would have
thought this had been discussed!)

Page 87….Ms Renefroe approximates current litigation on the Rigsby case now at
1/2 MILLION dollars…unbelievable!

Page 88- Jana Renfroe’s “absolutely not” comment about coordination or agreement
between Renfroe and State Farm attorney’s on this or any other litigation.

Page 89- She denies any knowledge other than what the Rigsby’s said in their
depos about the State Farm documents the Rigsbys refer to

Page 92- Hawley wants to know if Renfroe has lost any adjusters due to Rigsby
disclosures or due to the 20/20 show and Renfroe responds she doesn’t know ( my
own guess here is it would be hard to tell due to lack of storms since these
revelations and whistleblower case have been going on)

Page 93- remember the recent decision on the OK case involving SF and Renfroe?
Jana Renfroe indicates they had not even been following that case and were
surprised about the decision and also what the issues were on that case she
indicates were clothing issues with independents wearing SF clothes and
performance evaluation issues

Page 94- Very interesting closing answer by Jana Renfroe when asked if she
believe Cori and Kerri Rigsby and she answered “she didn’t know what to believe”

If I later find Gene Renfroe’s deposition posted or any of the depositions of
other Renfroe managers I’ll post them.

I hope others reading this learn as much as we did reading through this. Many assumptions I personally had such as State Farm and Renfroe possibly coordinating efforts, the when and where the Renfroe’s learned of the Rigsby’s actions, and the fact that the Renfroe’s didn’t know much more than the rest of the adjusting community about this whole whistleblower case until watching 20/20 sure were a surprise to read.

The outcome of these cases remains a mystery and a soap opera those in the claims community can’t help but follow since it is so very unusual for our industry to have such crazy actions going on. Hopefully, posting of depositions such as this will open many eyes that think the only thing to adjusting is a simple 3 day class. An adjuster and adjusting firm have serious problems and responsibilities to properly document claim files, thoroughly handle investigations, and properly document personnel deployments as well as very serious responsibilities to properly train those adjusters deployed to fulfill claim obligations to the policyholders who have paid dearly for the right to insurance protection during major disasters.

Update 3/22/09 – Since Scruggs went to prison, the Scruggs site was pulled down so the links that were in this post no longer work. I’ll see if Slabbed has a link to the deposition on their site.

Just when you thought the Rigsby/ EA Renfroe Whistleblower case/Scruggs issues couldn’t get worse!

December 14, 2007

Just when we thought we’d heard it all after the indictment of Scruggs over alleged bribery, today we now come across a new lawsuit alleging sexual misconduct and inappropriate use of the Rigsby documents by another partner in the Katrina Scruggs group according to this newest post by David Rossmiller of the Insurance Coverage blog found here. Make sure you read the full complaint  found here for all of the details and alleged misuse of the documents through a key firm in the Katrina Scruggs group firm, Nutt and McAlister according to this Insurance Coverage blog entry. Here is also the link Rossmiller provided in his blog with the complaint exhibits found here. (See Exhibit C which was Judge Acker’s order on the Rigsby documents).

David Rossmiller has been providing thorough updates on the Scruggs indictment and related issues so there is no need to report seperately on them here but you’ll find them fascinating and covered in great detail in his blogs beginning with the indictiment. If you don’t already know his blog address by heart, you’ll find all the “Scruggs Nation” blogs at  David Rossmiller’s Insurance Coverage Law Blog.

Other blogs of interest also providing excellent updates on the Scruggs/Katrina issues include:

www.overlawyered.com and here are a few samples of their updates found here and here.

Here’s a good summary of the players and issues involved as well by the NY Times found here.

Another good detailed source of information providing updates on the Scruggs issue is www.legalnewsonline.com and you’ll find the link to all of their Scruggs postings by clicking here.

Another is www.yallpolitics.com and here is just one of many blog updates notifying us of the selection of a judge in the Northern Florida district who will now hear the contempt case after Alabama judges recused themselves found by clicking here.

Rossmiller and others such as Legalnewsonline.com are posting information about how this ties in to AG Jim Hood and ramifications on the pending Katrina litigation against State Farm. Thus, of interest today was this posting about Jim Hood’s redesign of his website which formerly itemized their allegations against the carrier. Very interesting seeing what the redesign is all about! The article on that issue  was also posted today by the www.legalnewsonline blog found by clicking here. This made me wonder what’s become of the Katrina Scruggs group website Scruggs was running with constant updates including the “mug shot” of Lecky King, a claim management employee with State Farm over her alleged pleading the 5th during a deposition involving communications with engineer firms involved on some of the Katrina cases. I couldn’t find that photo anywhere on the site today but things have moved around quite a bit. I’m glad for her if they finally took that dern photo down. I found this copy(click here) sent out by the remaining partners of the Katrina Law group posted at the beginning of December about Scruggs withdrawal from the group while the indictment allegations are being sorted out (and it lists Nutt & McAlister as one of the 3 remaining group partners).

If you missed our 3 blogs on the Scruggs/EA Renfroe/Rigsby ongoing cases, here is a link to my earlier blogs which provide more specifics about the claim documents and allegations. You’ll find links to all previous blogs here on the subject by clicking on this link here.

We’ll all be watching to see how the indictment develops, what ramifications this will all have on the claim suit files, Hood’s action against the carriers, and for more information about the reason for Trent Lott’s resignation after his recent notice he will be retiring. I think there is still much more to be learned in the coming weeks and months ahead…..stay tuned!

I cannot imagine the claim managers having to report on these pending cases with every new twist and turn and reevaluation of their cases. This has got to be creating a tremendous burden on the claims industry. I’ve never witnessed anything like it in 30 years in the claims business. Remember when the worst press a claim department dreaded was a dissatisfied policyholder spray painting derogatory comments on their home or roof after a storm? That’s kids play after all of these soap opera events which have happened in the aftermath of Katrina. Not a good time to be in the claims business! Not only are staff managers and adjusters bearing the burden of this nightmare (slash soap opera) but the public is bearing the brunt of the litigation expenses by way of increased premiums and reduced possibility of carriers as more and more carriers reduce policies in force in coastal communities. When will this soap opera ever end so claims folks can get back to doing what they do best…..settling claims according to the terms and conditions of the policies? I’ll be waiting for updated blogs by David Rossmiller  and others that explain how these lawyers think this indictment, the retirement of Lott, the Hood cases,etc will end up resolving specific to claim files and suits pending. So far from what I’m reading in this article on the Clarion Ledger article found here, Lott doesn’t think he’ll be able to push through legislation he’d previously proposed before his departure.

We’ll post additional new decisions on the contempt case and other related issues as they develop.

New Developments in the EA Renfroe Rigsby Scruggs Whistleblower case

October 15, 2007

Here is a good update on the EA Renfroe, Rigsby sister, Scruggs case provided on the Insurance Coverage Blog providing an update of new details revealed in the case.


We had previously posted several blogs on this whistleblower case. If you missed them, you will find the links to them in our blog archives :

here, here, and here

I’ll post additional news on this update with any document links as I locate it this week as the majority of us in the property claim industry are following this very important case.


Update 10/16:

Here is the pdf for the reply filed by the special prosecutors against Scruggs that was filed:


And here’s a good new article on the updates:


2nd update 10/16/07- Here’s another great blog today with links to documents and more info on these new developments:


Scruggs Contempt case developments- Update ( 3 of 3 blogs on this subject)

August 24, 2007

We were able to obtain a copy of the Scrugg’s attorney’s response filed on the Contempt charges from the WSJ blog entry of 8/23/07  found here. Here is a link to the court document responding to the Contempt charges asking for dismissal.

It’s interesting to note if you read my earlier two blog entries here and here on the contempt case and the history of the whistleblower case that this response provides additional information. The other documents linked to in my earlier blogs indicates that they said the Rigsby whistleblowers first became involved with the documents in documents to Scruggs in  April 2006. However, this court response says they first contacted Scruggs in February of 2006 with a few engineer reports and the now forever infamous sticky note I wrote about in this blog. ( It just won’t go away!) then again in April 2006. Also, interesting to note in this court document, they state that there would not be charges filed against the Rigsby’s unlike the news article posted in our earlier blog this week that said there was still a possibility. Other things to note of interest in this recent filing by Scruggs attorney requesting dismissal of the charges is information that the appointed prosecutors may have a conflict handling such a case as they are opposing counsel on some railroad cases that Scruggs is also involved in.  It will be interesting to see how this case develops.

National Underwriter has also just put out this breaking news story on the Keker( attorney out of San Francisco who is representing Scruggs on the alleged criminal charge) action with a quote from insurance trade group PCI (Property Casualty Insurers Assn of America) who is pleased that this action is being taken. They also hope that the media will help get this information out so we are hoping you will read these comments and let others in the adjusting community know about these issues. We will continue to keep  you advised on any major developments.

6pm CST update 8/24/07- 

***Here is a late breaking announcement made on the Insurance Coverage blog with a judge’s decision on the Rigsby issues. Read it here .

*Update 9/1/07- Interesting updates on the Scruggs case in this 8/31/07  WSJ blog

Whistleblower cases and your E and O coverage- part 2

August 23, 2007

I have updated the 8/22/07 blog today to include information on the 2nd whistleblower RICO case, more info on the Scruggs whistleblower case, as well as to discuss adjusters need for E and O coverage. You can view that entire blog here:


Here are two more articles to read with Scrugg’s attorney commenting and a WSJ update from yesterday on the case:

Here are the first comments I’ve seen published from an attorney representing Scruggs on this:


Here is also the WSJ Law Blog entry from yesterday on the case:


See you tomorrow!


Well- nothing is simple on these cases. As soon as I thought I’d finished reporting on the whistleblower cases, the next item reviewed is this August 23rd blog alleging more allegations against carriers:


This was linked to in this AM in the morning blog entry:


Here is a June news article  on the Hood  breach of contract suit and a NU news article from May in case you aren’t familiar with that action involving the Katrina cases:



Here is an August 2007 Clarion news article about the carrier attempting to dismiss the suit:


I hope all of you  are trying to objectively understand what is going on with these cases. Take the time to go directly to the carrier websites and look at their news and press releases for their “direct from the source” news releases. You’ll find  quite interesting information in what appears to be a war of the press releases by all parties involved but I prefer to think of it as the carriers trying to educate the public about many misconceptions found in the press. I’m glad to see them posting information from their perspective when years ago they remained silent on these issues on their websites.

Off to work now..no time to specially link those articles vs just posting them as is!

Special Prosecutors file Criminal Contempt Charges on EA Renfroe/Rigsby Whisteblower Case

August 22, 2007

We will expand on this post later today but here are links to  yesterday’s breaking news stories on the EA Renfroe Adjusting firm/ Rigsby sister whistleblower case. The appointed Special Prosecutors in the case filed criminal contempt charges against Scruggs 8/21/07:

Here is a link to the AP Press news article: click here

Here is David Rossmillers’s Law Blog on the news: click here (see 8/22/07 entry)

Here is an August 15th Birmingham news story that the Rigsby sisters may also still face prosecution: click here

If you aren’t up to date on the recent appointments of the Special Prosecutors, here is a great Findlaw summary of this from August 3rd: click here

Here was the Judge’s order naming them: click here

Here is a transcript of the Contempt hearing  March 2007 with Judge Acker: click here


While this case is coming back to the front line news again, this is a good time to remind you of discovery and activity log notes. If you missed it, view this blog on the infamous sticky note arising through many articles and court documents on this whisteblower case. Click here.

I will be updating this with more news on the issue later today. In the meantime, Fox news is reporting that TS Felix should be named in the next few days and I’ll post the first news stories on that shortly along with updates on the Midwest flooding claim stats.


Update on this topic 8/23/07:

Some of the first news reports are coming in on the announcements and here’s one of the most detailed  from this WSJ report providing comments from Scrugg’s attorney indicating they are filing to have the charges dismissed. Click here. Here is also Peter Lattman’s WSJ law blog of  8/22/07 Click here.

Back to some of the more important news stories and documents posted over the past year on this topic(sorry I didn’t get back to this yesterday!) here is a list of items adjusters may wish to read to familarize themselves with the history on this case:

Jan 07 Claims Journal article summarizing the grand jury probe: here

2007 AL spring article on the initial contempt hearing: here

Sun Herald article explaining Rigsby allegations, carriers involved, and info on unsealing the court case: here . Note that the Sun Herald has run numerous stories on the case but the links we have show many of those articles are no longer available. Several can still be found on their site by going to search in their archives.

Tort blog about the unsealing of the documents: here

One of the most informative documents on allegations in this First Amended Complaint on this False Claim Act document. This document states that the Rigsby’s reported this case in 4/06 to the US Attorney then gathered the documents in 6/06 with the Rigsby’s then notifying the carrier after the “dump weekend” as it’s referred to in other documents. This document says they then left for vacation and upon return to the carrier’s office were “escorted out of the bldg” (gee- what did they expect!). It goes on to say in 9/06 that Renfroe initiated suit to return the documents. There is much info in this document to again include a copy of that infamous sticky note (drives me nuts..it’s every where on the net and an excellent example of why an adjuster should NEVER use anything other than the appropriate activity log to document file activities..adjuster 101 stuff!). This report also discusses Haag, the carriers, and the employees  alleged to have shifted damages to wind, Xact Total, and much more. If you don’t read anything else, read this whistleblower’s summary of the activities they allege took place. Here.

Here’s a still current link to the Sun Herald summary of the case when it was unsealed..here

Scruggs group post of the exhibit on the EA Renfroe Code of Conduct form here

You might want to follow this current Clarion Ledger new poll -the results are to be published 8/24 asking if the whistleblowers should be prosecuted..thus far today it is showing only 2% say yes and 87% say no..here

Here’s the Scruggs June 07 Press release on the RICO case they filed on these allegations: here

Here is the RICO complaint filed 6/20/07 (101 pages of interesting reading) here

If you are not aware of it- here is a seperate whistleblower case we are also following making similar allegations of movement of damages to NFIP vs the wind carrier . Here is an article from a NOLA Times Picayne blog summarizing this 2nd whistleblower case: here

Thanks to this posting on the Insurance Coverage blog- here is the Complaint on the unsealed second whistleblower case: here

This complaint document names the names of many carrier employees/independents? Make sure to view the treble damages requests beginning at approximately page 88 here. We’ll try to get to a blog entry discussing errors and omissions coverage and things an adjuster needs to do for coverage to protect themselves against such a complaint as many new adjusters are not aware of their need for insurance coverage protection.

This is a large document at 242 pages which are the exhibit documents Scruggs group had posted. Click here. All adjusters should read this document to see what happens during discovery with your letters and file documents. They can become part of suit documents as they did on this case. This document discusses the names on many different cases involved in the allegations and provides exhibits of many carrier documents. Trainees who don’t know what correspondence on various issues should look like could learn alot from viewing this entire document to learn about coverage denial letters, reservation of rights letters, statements of loss,etc.

Another interesting WSJ blog from 6-21-07 by Peter Lattman “The Thrilla in Pascagoula”. This blog gives alot of details of further actions filed trying to have Scruggs removed from the case. Here

Here’s a good www.nola.com article on the 2nd whistleblower case: here

Here’s a Mobile Press Register article quoting Pilot Adjusting Co’s attorney: here

Here is a National Underwriter story summarizing the case: here

This National Underwriter article lists all the names of the adjusting firms and parties alleged to have shifted damages to flood (the whistleblower names have still not been revealed that I am aware of): here

This article posted again here to make a point…this explains what the whistleblowers stand to gain by making such allegations: here

Congressman Gene Taylor’s posted information on alleged wrong doing by carrier’s: here

Here is a summary 7/6/07 in the Bloomberg news on the 2nd whistleblower case: here. Note the quotes by various carriers commenting on the case..I believe this might be same link but here it is if not: here

Here is another article 7/9/07 saying the judge withdrew request for federal intervention on the whistleblower case: here

Here are 3 things you should read on this Insurance Coverage blog entries/attachments on the case here, here , and here on the Judge withdrawing the request. These documents include Homeland Security reports and other important documents you need to read to learn where these cases are going.

Here is another important document by the above blog which is a Branch consultants document on the 2nd whistleblower case. Here Note the alleged 4 whistleblowers are still not named in this document. I’m curious if these folks are still out adjusting claims?

While trying to understand all of these court documents and issues mentioned in these cases, I did some research on the False Claims Act and was interested to learn that the Acts vary by state. Some states allow only for False Claims act cases on health claim issues. Here is  state by state information found at www.phillipsandcohen.com website located while researching these acts:

Here is the one with the state links: here

And this one provides excellent information on the False Claim Act in general: here

So where is this all going? I can’t pretend to know. We’d love to have an attorney interpret all of this for us if we have any volunteers but here are some things you may find very interesting. First of all- while doing this research, I found this report on the web which PRE DATES KATRINA by the GAO office in April 2005 in testimony to the house. Make sure to make note of the number of flood certified adjusters at less than 5,000(now can you imagine what this means for all the current Midwest flooding today?). Here it is. Note this report also says that only 4% of flood files were reinspected. So let’s move forward to the GAO testimony over 2 years later in this June 2007 Testimony about the inability of FEMA to assess the wind damages vs flood damages found:  here  Combine these 2 GAO reports with a review of the September 2005 directive by Fema to WYO(Write your own) carriers with expedited instructions on handling flood claims found : here and the single adjuster concept for flood claim handling found in this FEMA procedures document: here sure makes you wonder if the right hand knows what the left hand is doing. Is there any wonder there is so much confusion?

If you missed our blog on more current info on the fee issues on the wind vs water, take some time to read this earlier blog on Adjuster Fees in the news found: here

I am posting all of this information in the hope that adjusters will learn to understand how very important proper documentation is in their claim files. All of these suits, news articles, congressional hearings,etc drive home the very point that your file is subject to discovery and much discussion in press articles.

You cannot take this lightly and it is of utmost importance in today’s environment that you properly protect yourself with E and O coverage and other coverage  you may need. Many adjusters are leaving their E and O needs to the adjusting firm but those I’ve asked have never even considered asking the adjusting firm for a copy of the E and O policy which is alleged to protect them. Do you know what coverage you have? What are the E and O limits that protect you? What are the policy terms? Who is the carrier and the policy number? Is there a deductible? Does the E and O policy protect you if you are one of the adjusters named in one of these suits? Does the E and O policy provide defense costs for you? We’ve had an adjuster advise us this past year that his personal attorney fees to defend an allegation were not covered and over 40K over a 2 year period. I am not an  E and O expert but you need to talk to your adjusting firms to determine how you will be protected BEFORE this happens to you and get the answers to these important questions whether you are providing your own E and O or they are and deducting it from your fee bill payments.

This CNN Money article says a January 31, 2008 deadline has been set on the whistleblower case: here so I imagine that there is much more to learn about these cases in the next weeks and months ahead.

Here is a link to info on E and O posted on the National Association of Catastrophe Adjusters website you might want to look into if you are not presently covered: here There is also good info here on health coverage. Speaking of that..I’ll end this long blog entry directing you back to this important blog entry about FL having open enrollment for health insurance benefits for self employed and independent contractors during the month of August 2007 so you don’t miss the deadline to apply should you also need this important coverage: here

See you tomorrow!


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