Transcript of the Scruggs Sentencing hearing and other news reactions

June 30, 2008

 

Numerous stories have come out since Friday’s sentencing of Dickie Scruggs. Below you will find links to some of the most interesting of the many articles written:

The Sun Herald has posted a complete copy of the Sentence Hearing Transcript here:

http://www.sunherald.com/newsupdates/v-print/story/653064.html

See AG Hood’s comments:

http://legalnewsline.com/news/213854-ag-hood-somber-about-scruggs-sentencing

Here’s a photo of Dickie Scruggs and son Zach Scruggs (who will be sentenced this Wednesday) walking into the court house:

http://www.thedmonline.com/media/storage/paper876/news/2008/06/27/News/Breaking.News.Judge.Hands.Down.Full.Sentence.For.Scruggs-3386093.shtml

Here is a Clarion Ledger article quoting Attorney Jones who was involved in the suit with Mr Scruggs over the disputed attorney fees in the suit which was involved in the bribery charges:

http://www.clarionledger.com/apps/pbcs.dll/article?AID=/20080629/NEWS/806290371&s=d&page=3#pluckcomments

I’d also check out Legalnewsline.com for some of the best articles I’ve read including this one:

Full Five for Emotional Scruggs/ Hinds case-2nd bribery case mentioned in this article as well:

http://legalnewsline.com/news/213839-full-five-for-emotional-regretful-scruggs

WSJ Law blog reports Scruggs nearly fainted and had to be seated during sentencing:

http://blogs.wsj.com/law/2008/06/27/breaking-news-scruggs-gets-5-years-in-prison/?mod=googlenews_wsj

 


Scruggs Sentencing Scheduled for Friday 6/27/08 in Bribery Case

June 26, 2008

The eyes of many claims personnel are watching this week’s activity in the Scruggs bribery case since the charges stem from a dispute over attorney fees received on a settlement Scruggs reached with State Farm over Katrina claims. The bribe is alleged to have developed over a dispute Scruggs had on the division of the  attorney fees  between members of the Scruggs Katrina group in which Scruggs wanted the suit by Jone’s moved to arbitration for settlement and allegations of a bribe that Scruggs and other lawyers admit to participating in with hopes a judge  move the case to arbitration to settle the dispute.  A history of the case is contained in the Sentencing Memorandum and Scruggs Memorandum linked to below if you aren’t up to date on the history of these allegations.

Tomorrow is the sentencing date for Dickie Scruggs. There has been quite a bit of news this week regarding letters sent to the Judge asking for leniency for Scruggs. Here are links to quite a few news stories and blogs on the topic here, here, here, and here. ( Sun Herald, Ya’ll Politics, Folo, Rossmiller Blogs).

Since I began this blog this afternoon, FOLO is also reporting that Jone’s attorney, Grady Tollison, has received a subpeona for tomorrow’s hearing and quotes him as saying that actually the damage to Jone’s would have been based on a fee dispute of over 50 million (versus the 28 million discussed in the news on the dispute) in attorney fees due to settlements with carriers other than State Farm as well. Here is a link to that newest information: Click here and here in yet another Sun Herald article and a FOLO blog.

The Sun Herald has also published a link to the Sentencing Memorandum of Richard F. Scruggs as well as a Memorandum by the US Attorney’s office. Scrugg’s memorandum is a lengthy 32 pages going back through his childhood years, his military career which I’d previously wondered about, his law school days and his career. There is much written in his memorandum about his generosity as well as in letters submitted by his friends and associates in the letters they sent to the Judge. It is very disturbing to read of his wife’s illness and I’d imagine this is just a horrid time for her and their daughter.

 As great as his gifts and donations have been and as great as his achievements have been, it is hard to imagine leniency for him when you remember the pure hell the insurance industry has been put through and the unseemly things such as payment to the Rigsby’s, the trailer meetings, the pigs/lipstick jokes, the billboards in Illnois, the events with Hood and Lott, and other events that have been so very unprofessional in the insurance litigation, his blasting of insurance personnel photos and the blogs on his website prior to it coming down after the bribery events. Even had insurance company personnel made some incorrect settlement decisions on wind /water issues, I saw no need for the unprofessional public circus that was made of this litigation which resolved nothing for many of the cases that pend still today that are involved in this ongoing nightmare. I cannot even begin to imagine the nightmare it has been for the policyholders involved. This does not mean that I think coverage should have been provided where none existed (flood exclusions or absence of flood policy,etc). I just believe that these cases could have moved forward to resolution in some manner much more professionally. I for one am very happy to see the recent comments from the Judges asking all parties to keep their focus on that resolution long overdue.

Mr Scruggs is asking for sentencing at 30 months while the US Attorney is asking for the maximum guideline of 60 months. Their memorandum says in part that the Judge should consider the difference of the initial offer by the SKG for Jone’s share of attorney fees from the State Farm settlement at $1.2 (approx) vs the $5.3 million that Jone’s sought in his suit against Scruggs for an approx $4 million intended loss to Jones had their bribe been successful. See new info just posted above about Jone’s attorney who says the intended loss to Jones was much more due to settlements also reached with other carriers.

You can read the full contents of the US Attorney’s Sentencing Memorandum and Scrugg’s Memorandum via the links on this Sun Herald Article (see links to right near article title): Click here

It has been quite a while since I blogged regarding updates on the Scruggs cases but there have been significant numbers of actions going on involving the EA Renfroe, Rigsby,  and State Farm cases. Frankly, it is just more than one person could possibly keep up with by updates here although I regularly read them to keep up to date myself. I will shortly post some of the most important things that have developed from a claims management- claims adjuster standpoint to try to bring things more current on the blog. These developments include updates on all of the Rigsby depositions, discovery of computer records on the Rigsby computer, and much much more to include information that there was yet another hearing on the record production this afternoon in Judge Walker’s chambers.

 I remain hopeful that EA Renfroe is successful in the Rigsby/Renfroe case and am appalled at what the Rigsbys have put them through. This could have happened to any adjusting firm that had employed these folks and I think the adjusting community should be doing all they can to stand behind the EA Renfroe adjusting firm. Not many firms would have had the resources to fight this lengthy case and all they have endured as a result of the Rigsbys actions that could have cost them their adjusting firm (by carriers avoiding using them) and their resources. I do not personally know Gene or Jana Renfroe but they have earned my respect as I watch their handling of the highly unusual actions on this case. I have yet to read anything against their firm of any validity even mentioned by the Rigsbys so it is quite a shame that they have dragged them through years of litigation when the Rigsbys allegations have been directed to carrier activities versus adjusting firm directives. The Rigsbys were involved with this adjusting firm I believe eight years before their allegations. What a violation of the trust this firm placed in them to work as managers for them in the field where if any problems existed in the field, the Rigsby’s should have been the eyes and ears for them at the storm site and immediately reported any concerns to the independent firm THEY CHOSE to work for.

I will post the actual Scruggs sentence information as soon as the many news sources start updating this tomorrow. Backstrom (attorney in Scruggs office) is also scheduled for sentencing tomorrow and Scruggs son Zach is scheduled for July 2nd sentencing. News reports and the US Attorney memorandum linked to in the Sun Herald article are suggesting a 30 month sentence for Backstrom.

You can always find the newest court documents and discussions regularly posted at the following websites if you are interested in almost daily updates. These various websites have a wide range of views on the Rigsby/Scruggs/EA Renfroe/State Farm updates from the public, law blogs, concerned MS citizens upset about the slab cases, and insurance coverage law views which I find fascinating to understand all perspectives of this ongoing Katrina litigation:

State Farm’s Katrina response updates- click here

Insurance Coverage blog –                     click here

Ya’ll Politics blog                                –  click here

Folo- blog                                            - click here

Slabbed- blog                                       -click here

I mentioned in a recent blog that carriers are taking notice of the blogs and it’s becoming much more common for them to post on blog comments. Well this week, Judge Biggers also recognized the blogs allowing MS Attorney Tom Freeland who is an author on the FOLO blog (uses name NMC on the blog) to view the pre-sentencing letters along with the press who had also filed motions to view these letters. 

Independent adjusters and claim managers are watching these blogs as well as they are a frequent source of court documents we are also interested in viewing for accurate information on hot topics rather than just receiving bulletins with talking points which in the past used to be the only source of information we had on lawsuit files.

The post Katrina litigation has had a major impact on independent adjusters as carriers increased staff adjusters due to the negative implications the Rigsby actions as independent adjusters has created for all other independent adjusters who would never consider violating the code of conduct forms signed nor would they have taken carrier confidential documents. I think the majority would have followed carrier established procedures for reporting any allegations of wrongdoing on the part of other independents or staff adjusters instead of taking the route the Rigsbys chose to take. Their actions have cost untold numbers of independent adjusters claim assignments as carriers “staffed” up to avoid independent adjusters having access to their records as the Rigsbys did. How many independent (and staff) adjusters have been listed in suits and will suffer increased premiums on their errors and omissions coverage as a result of having to report these cases to E and O carriers. The ramifications of the Rigsby actions have been a detriment to the entire independent adjusting/insurance carrier relationships. What a shame. You need to be reading all of the things being filed to truly understand the details of what is being reported before making a decision about how you feel about this. I doubt we ever know 100% of the truth about what happened but by following these cases, we learn more each and every day it seems.

I personally think it is very important that the claims industry stay tuned to these postings for educational purposes. If we don’t know what went wrong or the alleged claim issues leading to lawsuits….how can we ever improve claim handling activities to avoid repeats of the post Katrina litigation or understand concerns expressed by policyholders when we are out in the field ? By providing real life examples, it is quite educational to new adjusters during training to understand why proper file documentation is so very important.


Sentencing date set in Scruggs Bribery case

May 30, 2008

The sentencing date for Scrugg’s and his son and Backstrom has been announced for July 2, 2008 (moved from initial date of June 18, 2008 per the following blog posts:

http://letterofapology.com/2008/05/30/scruggs-sentencing-set-for-july-2-and-other-updates

http://blogs.wsj.com/law/2008/05/30/sentencing-roundup-weisss-looms-the-scruggs-gang-gets-a-date/

http://www.clarionledger.com/apps/pbcs.dll/article?AID=/20080529/NEWS/80529034

The www.letterofapology.com link (1st above) contains a copy of the judge’s order in the case and information about why the sentencing date was moved to July 2, 2008.

Here’s one more blog on the subject providing additional background info on the Scruggs case:

http://www.legalnewsline.com/news/213036-five-weeks-until-scruggs-learns-fate

Here’s a late edition- an interesting blog over at www.property-casualty.com which is National Underwriter’s editor Sam Friedman’s blog on many insurance issues that would interest many of you:

http://www.property-casualty.com/2008/05/how_the_mighty_have_fallen.html


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.


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.

www.insurancecoverageblog.com/archives/industry-developments-prosecutors-court-filing-scruggs-defied-injunction-for-monetary-gain-hood-helped.html

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:

http://www.legalnewsline.com/content/img/f202583/alabama.pdf

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

http://www.legalnewsline.com/news/202585-feds-scruggs-ag-hood-worked-closely-on-whistleblower-controversy

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

http://www.insurancecoverageblog.com/archives/industry-developments-more-on-usa-v-scruggs.html


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


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