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

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.

Advertisements

We'd love to hear from you- please leave a reply with your comments!

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: