Breaking News (Smile)- David Rossmiller is Back! First full post on Zach Scruggs

 

In the first of our Just a mentor moment sponsored by ClaimSmentor for quick claim hot topic links here we go!

Wow, I had just posted about two days ago in a post about how much those who follow the legal developments on social networks miss David Rossmiller’s posts at the Insurance Coverage Blog.

 Between David’s famous blogs that thousands in claims on our side of the fence (and those just lurking from the other side) get a pretty well rounded pictures of current claim litigation hot topics if you combine reading at Rossmiller’s site expressing an insurance coverage /defense attorney standpoint, Chip Merlin’s blog from a consumer advocate attorney ( an now the infamous Citizens Mission Task Force Consumer Advocate) , now throw in a Slabbed blog review and we have atleast all sides of the published internet social network opinions for viewing.

Yall politics you will love if you want all sides of the stories published together! Hey Yall Politics- when you are you going to add in the Chip Merlin blog to the Scruggs stories so we have all the important blogs? Hint hint…. by the way – wouldn’t claims adjusters and managers love to see these 4 together LIVE on a panel for a Q & A discussion? It would be sold out within 10 minutes!

By the way- if  you scroll down the right side of our blog here, you will find links to Claims Blogs of Interest I have found quite interesting when trying to locate information! We hope you will enjoy them!

http://www.insurancecoverageblog.com/archives/industry-developments-scruggs-nation-zach-was-halfway-home.html#trackbacks

Just another mentor minute link-When was the last time you thanked your mentors?

Here is who I thank as my mentor! Have you thanked yours by paying it forward?

http://www.claimsmentor.com/about.php (Now at 1,010 members and growing)

ClaimSmentor began on 12/08/2005 in recognition of William Robert Kane Sr. my father, my mentor, my friend.ClaimSmentor inception was on the 5th anniversary of his departure.. I thank him continuously for his willingness to mentor me throughout my life and my career. We hope all of you seeking a mentor get matched up so you have someone to truly thank for helping you along the way and that you too pass that on to a new trainee years from now.

 

Thank you David, Slabbed ( I still don’t know who they are), Chip Merlin, and Ya’ll Politics! Now when  will the carriers pipe in? (Yes we know they  THINK they can’t) Feel free to reply to this post and let the claims community know who you want to thank publicly!

Settlement negotiations between Plaintiff E. A. Renfroe & Company, Inc. and Defendants Cori Rigsby and Kerri Rigsby -Whistleblower Case- Links Updated Information

Thanks to Slabbed for updating this topic many claims industry professionals are interested in. You can find any news your looking for over there:

http://slabbed.wordpress.com/2009/03/02/whats-another-30-days-when-things-are-going-so-well-renfroe-v-rigsby/

You will find links over there to all prior posting they have done. I’m looking to the future working on training issues but will just post quick links as I come across them so you can view updates from other sources you may not know about.

***Update- David Rossmiller is back at  The Insurance Coverage blog (see right column for links-Wordpress says I’ve linked too many times to this blog so I’ve edited these entries 3/21/09)  and has more posts than you can imagine on this case and hopefully now that he is posting again, he’ll post on some of the major developments during the six months he has not been posting. David- thank you for your humorous online e-mentoring. It is appreciated more than you know.

https://dimechimes.wordpress.com/2009/03/03/breaking-news-smile-david-rossmiller-is-back-first-full-post-on-zach-scruggs/

Scruggs Scandal heats back up in MS- Links to Blogs, Newspaper, Comments in the News

You can find all news articles, blogs, and sources of info and comments by bloggers on these links at Yall Politics:

http://www.yallpolitics.com/index.php/yp/categories/C10

Thanks to Yall Politics  for posting these updates. I don’t know who they are but they surely are the most persistent in providing updates! Thank you Yall Politics!

MS AG Hood and State Farm reach agreement on Katrina disputes Wednesday 8/6

 

 

MS AG Jim Hood and State Farm apparently reached an agreement on Katrina insurance claim disputes on the wind vs water claim settlement issues. We’ve gone around the net for a wide view of opinions on this news and here are some very different perspectives on who is the victor if there is one in this lengthy battle:

First we have the Sun Herald News from Biloxi, MS who includes a response from State Farm regarding comments made by AG Jim Hood on the settlement you can view here:

http://www.sunherald.com/199/story/731995.html

Legalnewsline discusses State Farm’s reaction about “perplexing comments” made by AG Hood:

http://www.legalnewsline.com/spotlight/214612-state-farm-calls-ag-hoods-spin-on-settlement-perplexing

For a truly different perspective see comments from the anti insurance side of things- look at what the SLABBED web blog is saying on this :

http://slabbed.wordpress.com/2008/08/06/breaking-jim-hood-settles-with-state-farm/#comments

and a second SLABBED blog post today:

http://slabbed.wordpress.com/2008/08/07/ag-hood-and-the-state-farm-settlement-by-the-record/

Directly from State Farm’s Hurricane Response web page is this:

http://www.statefarm.com/about/hurricane/sf_suit_dismissed.asp

Here is another detailed story from the National Underwriter’s Property and Casualty news providing additional background and information on this “settlement”:

http://www.propertyandcasualtyinsurancenews.com/cms/nupc/Breaking%20News/2008/08/06-HOOD-dh?origin=Auto%20and%20Homeowners

Saving the very best for last, you won’t want to miss Attorney David Rossmiller’s detailed and often humorous look back at Hood’s deposition testimony and other detailed history on these cases with Hood:

http://www.insurancecoverageblog.com/archives/industry-developments-amazingly-hood-claims-credit-for-state-farm-payments-announces-settlement-of-lawsuit.html

Here are links to 3 prior blogs we have posted on this subject :

https://dimechimes.wordpress.com/2008/02/07/did-the-state-farm-vs-ms-ag-hood-case-settle-2608/#comment-1153

 **Update-here is the pdf of the agreement posted by the Sun Herald:

http://media.sunherald.com/smedia/2008/08/07/06/state_farm.source.prod_affiliate.77.pdf

Transcript of the Scruggs Sentencing hearing and other news reactions

 

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

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

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

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

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!):

http://www.statefarm.com/about/media/media_releases/rigsby.asp

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

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

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

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?

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

A CONCURRENT RESOLUTION COMMENDING THE ACTIONS OF CORI AND KERRI RIGSBY FROM OCEAN SPRINGS, MISSISSIPPI, FOR THEIR ASSISTANCE IN THE INVESTIGATION AND SUBSEQUENT LAWSUIT AGAINST THE INSURANCE INDUSTRY FOR FAILURE TO PAY CLAIMS FOR PROPERTY DAMAGE CAUSED BY HURRICANE KATRINA.

     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.

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

Results

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.

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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.

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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.

State Farm VS Hood- Part II- So what happened 2/19? New developments

Just when we thought that the MS AG Jim Hood and State Farm had resolved their differences with the dismissal of the case involving Hood’s attempts to reopen criminal investigations against State Farm based on a “new focus” (carrier alleges NFIP files instead of Katrina HO claims), things came back into the headline news and blogs 2/19/08 with a big bang. We wrote about the dismissal earlier this month in this blog..click here.

The dismissal included sealed settlement documents so we thought that would be the end of the news on the case. The blogs at numerous sites have been hot and heavy debating the sealed documents and the rights of the citizens of MS to know what Hood agreed to. Yesterday’s major developments began with articles posted at the MS Clarion Ledger news where MS AG Hood spoke with them regarding the settlement. This was followed by a major goof by an attorney representing State Farm who replied to a Hood’s office email release on the story failing to realize that the recipients included among them AP reporters.

Without going back through all the details, I’ll point you to several ongoing blogs and news links to read it all for yourself. I’ll be doing the same later this week on all of the developments in the Scruggs alleged bribery case and developments happening the past two weeks or so on the contempt case (Rigsby/EA Renfroe). Things on all things Scruggs are moving at a rapid fire pace making it impossible to keep up with the updates as far as new blogs are concerned while dealing with other responsibilities at the moment. I’ll link you later this week to some of the best of the best reporting on blogs and in the news I’ve come across the past few weeks.

I do have one question I can’t get off of my mind that will require lots more research regarding “the dump weekend documents”…where did Gene Taylor get the document he shared with the congressional hearings? How would he have had such intimate details on insurance cases? Yes, it’s all been in the news but it would be interesting to know how he came to know about the cases he presented to the hearings and where he got the legal documents from. He’s got them posted on his website. I have a real problem with the fact the committees heard testimony about NFIP claim handling problems from Lott, Taylor, and Hood and Hood’s testimony in court on the State Farm vs Hood case was pathetic concerning his alleged “lack of knowledge” on file particulars even though he admits to having the Rigsby documents. More on that later when I can dedicate a day to looking back through the congressional testimony documents vs documents in court on several other cases. It just seems awful strange that we hear little from Lott or Taylor these days since all of the Scruggs cases have exploded. Here is a link to Gene Taylor’s web page– click on the link on the top right hand side of the web page where he refers to Insurance Fraudulent Practices (and why has he not updated this to include the fact GAO initial studies found no evidence of wrongdoing?)

Now getting back to the Hood/ State Farm fiasco yesterday:

David Rossmiller had 3 seperate blogs on the incident which link you to all of the news articles in the Clarion Ledger and providing actual information on the email details to which the State Farm attorney had replied to yesterday in these 3 blogs. I can’t get the headline to click to allow a link for some reason today so just look for these 3 blogs on 2/19 to read all of the information posted at www.insurancecoverageblog.com :

February 19, 2008

Reality takes a holiday on High Street

February 19, 2008

Hood denies there is a settlement in State Farm v. Hood

February 19, 2008

State Farm attorney mistakenly sends query about having Hood held in contempt to reporters, Hood’s press spokesperson

Forbes.com was the first report I’d read on the email fiasco with the State Farm attorney in this article.

Ya’ll Politics-2 articles posted yesterday- click here for this article captioned:

AG Jim Hood goes on offense . . . and fumbles the ball

Is this guy for real?
by Alan Lange

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Email May Hurt State Farm, Miss. Truce – click here

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Also- be sure to read about this Sid Salter 2/18 blog from the Clarion Ledger about Hood- click here to see some ridiculous comments by AG Hood about prosecuting some of the attorney’s involved that have plead guilty/or been involved in the bribery allegations:

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SALTERBLOG – Hood: Prosecuting on state charges “would be like prosecuting a relative (link above)

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Moving over to the FOLO blog (at new location) be sure to review this blog entry titled. You won’t want to miss the now 154 comments below the entry. Click here to view it. 

Jim Hood whistles past the graveyard

February 18th, 2008 – by NMC · 154 Comments

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Now something I don’t see anyone discussing as it relates to the State Farm vs Hood case is the comments by State Farm in this motion filed 2-14-08 on the McIntosh vs State Farm/Forensic case where they are seeking to have the remaining members of the Katrina Litigation group dismissed from the case in the Reply Memorandum in Further Support of Defendent’s Second Motion to Disqualify the Barrett, Nutt & McAlister, and the Lovelace law firm. See page 16 in this Reply Memorandum for their comments about the State Farm vs Hood case and sealed documents. You can find that Memorandum over at Rossmiller’s 2/19 blog about half way down  in the blog titled:

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February 19, 2008

Update on State Farm motion to disqualify Katrina Litigation Group

this article where it says (Here’s a copy of the brief, with the accompanying exhibits)

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Again, I apologize I’m not getting the font link to fix these copy pastes  so the post sizing is consistent but still want to get the information out to adjusters in spite of that problem. Hopefully, I’ll get that issue figured out with the wordpress folks help soon as time permits. It’s not a matter of just moving it to a word document then reloading it because it is quite time consuming to go back and enter the links all over again so you can click on items and I don’t have that kind of time right now with daily visits to the radiation clinic for my daughter’s 6 weeks radiation treatments for her tumor so bear with me here.

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I’ll leave you today with this link to the Clarion Ledger video interviewing Hood on prosecuting those involved in the bribery case. Sometimes a picture is worth a 1,000 words. Click here to view it.

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Speak out in reply to this blog- what ramifications do you think will follow Hood’s discussion with the Clarion Ledger as well as the carrier’s attorneys email fiasco in light of the sealed agreement? How are adjusters out in the field feeling about the open/close/reopen investigations on this case?

State Farm vs MS AG Hood Criminal Investigation case dismissed today per agreement reached on 2/6/08

The Sun Herald/AP breaking news story received late this evening in an alert indicates Hood and State Farm resolved their case late today.

You will recall this is the same case that Scruggs was called on for his deposition earlier this week. According to many other news reports out this week, Kerri Rigsby also received a subpeona to appear at this week’s court hearing.

Here’s the link to the breaking Sun Herald/AP article received with more news to follow as it sounds like more details will follow tomorrow:

http://www.sunherald.com/news/breaking_news/v-print/story/352391.html

Here is a similar but shorter news story over at the Clarion Ledger:

http://www.clarionledger.com/apps/pbcs.dll/article?AID=/20080206/NEWS/80206063

David Rossmiller at the Insurance Coverage blog has been providing great updates this week on the case at The Insurance Coverage blog  as well some interesting comments and even a LIVE blogger in the court room today over at the FOLO blog at www.folo.wordpress.com.

More on this development tomorrow 2/7 as announcements and details are located.

Update 1:45 AM- Looks like Rossmiller’s been up all night as well and leave it to him to post this informative yet humorous update to yesterday’s events and possible resolution of this case:

http://www.insurancecoverageblog.com/archives/industry-developments-third-update-state-farm-v-hood.html

Update- 9:30 am 2/7/08- Folo comments indicate the court is back on at 10 or 10:30 am this morning so we’re watching for the court announcements on many sites

http://folo.wordpress.com/2008/02/07/state-farm-v-hood-deal-or-no-deal-by-nmc/#comments

Update 12:05pm 2/7-

Here is another Sun Herald article announcing the dismissal and the case under seal. Make sure to note the info in this news story about another case pending between Hood and State Farm on a civil case in another MS county though- only the Criminal investigation suit is dismissed according to this article:

http://www.sunherald.com/news/breaking_news/story/355138.html

 Update 9:15 pm 2/7:

Rossmiller has the dismissal order up here:

http://www.insurancecoverageblog.com/State%20Farm%20v.%20Hood,%20order%20sending%20case.pdf

Update 2/8/08: The settlement may be sealed but they now have the hearing transcript of 2/6 and 2/7 up on Rossmiller’s blog:

http://www.insurancecoverageblog.com/State%20Farm%20v.%20Hood%20transcript%20of%20February%206-7%20hearing.pdf

I’ll blog on that hopefully by Monday after taking 4 hours to read it this evening. Anyone in claims will be totally amazed (digusted?) at Hood’s testimony at the hearing. His figures about EA Renfroe handling 85% of the carriers claims, his testimony that he was trying to force the carrier to no longer use their anti concurrent cause exclusion in the agreement, admissions that the initial subpeona on the 1st criminal investigation had included requests for production also of the NFIP files,etc….no wonder this thing settled so quickly. He looks pretty bad across the board in his testimony and also lacked MUCH knowledge for someone called to testify before congressional hearings yet admitting in his testimony he knew little about flood policies. I could go on for hours but it’s Friday night. More on this later but I wanted to get it posted for any of you wanting the latest updates.

**Update 2/11/08- It appears I’m not the only one thoroughly disgusted about Hood’s testimony last week. You’ll just have to run over to the Insurance Coverage blog and read Rossmiller’s detailed evaluation ..you’ll love this “stupid T shirt” comments..I’m still smiing. (look at 2/11/08 posting)

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

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

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.

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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

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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)

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

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

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

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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.

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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!

Will someone lose the infamous post it note already?

When will we ever hear the last of the infamous  post it “sticky ” note? You see, it’s become quite the talk in lawsuits and insurance articles since Katrina. Together, let’s find a way to bury the use of the dern practice.

First of all, a little history on the real intention of post it notes by claim managers.

There was one school of thought that said you shouldn’t use sticky notes on claim file jackets because “if it’s not in the activity log …….it didn’t happen”. The problem is that sensitive adjusters didn’t like being critiqued in a claim file where their errors were pointed out. You see files are always pulled later for various management surveys and they did not like the perception others would have that they didn’t understand their job or were error prone on file requirements. Managers that dared to use the logs to properly document their review activities faced the risk of being unpopular which could lead to negative comments on the much dreaded employee opinion surveys where adjusters rate their managers. Carriers often require management log notes be written in a dedicated color thus the term “red ink” in the file. It stands out  as if to say “wrong wrong wrong” and adjusters just don’t like it. Adjusters often felt the need to then “duke it out” in the file to justify their activities which is never pretty in an activity log.

The other side of the fence used to use them as it was more “adjuster friendly” to avoid critiquing an adjuster’s work product in the file while you gave them a first opportunity to correct the error of their ways unless you found trends with the same mistake often repeated. First of all, this practice is wrong as management reviews are an important aspect of the claim process to make sure all coverages are addressed and that files are properly documented. By using a post it note, they could easily detach from the claim jacket and a manager risks the possibility that the adjuster will throw out the note hoping for a less particular manager to review and approve the file while their boss was on vacation or while multiple managers are assisting with file reviews during a storm. Anyone in management knows the adjusters who circumvent their file authority and run over to another manager to see if they’ll approve it. We are all too busy to have to review claim files  multiple times  especially during a catastrophe operation. A manager shouldn’t have to go back through an entire file to verify the errors are then later  corrected especially with a volume of claims during cat season. They should be able to review their prior log entry and then be able to go right to the pertinent items in question to assure that the necessary corrections are made. Another reason the practice of sticky notes should be avoided is because it became all too convenient for the manager type who lacked the confidence to make a call on a tough decision in the file. Rather than be questioned later by their middle manager for a call they made during an audit, they’d give the adjuster instructions outside of the file on a post it note. Great- just great! Where does this leave the adjuster if a case went to suit over a coverage decision they handled at the request of their manager? I know I nor the adjusters I came up the ranks with appreciated a spineless claim manager type who wouldn’t support their decisions in a file.

So I continue to ask myself- what could they have been thinking with this infamous little sticky note? You mean you haven’t seen it? Here it is as shown in numerous articles……..

The importance of avoiding the use of post it notes becomes quite apparent when viewing the following news stories and litigation complaint allegations. We are not picking on this one carrier as we are sure this isn’t the only firm who has ever used a post it note while providing instructions for the reasons listed at the beginning of this blog.

The sticky note shown above comes from this article by ABC News. You’ll also see it blasted in the press in this article about MS Gene Taylor’s testimony at a house subcomittee hearing . How about the fact it’s traveling the political blog circuit such as Ana Maria’s A.M. in the Morning blog here. If it hasn’t made the nationwide circuits enough in the news, how about the fact it’s appeared in this document presented by MS Attorney General Jim Hood as part of his testimony before another house subcommittee(see page 34 of pdf document). It seems no one is exempt from having to testify about this as shown in the deposition of Ms Deputy Insurance Commissioner Harrell who was even asked about it as shown in this Scruggs Katrina group pdf document of Harrell’s deposition on page 98.

We can’t pretend to understand why such an important comment was made on a sticky note as we have no idea. The fact this sticky note is making the rounds through Katrina litigation speaks volumes about the perception by those writing about it. You read the postings and you decide what those perceptions are and I don’t think you will find them a positive reflection on our industry.

You should avoid the use of  post it notes in all cases. Electronic activity logs in the ever increasing use of electronic claim management systems hopefully will decrease the use of such practices. This wouldn’t help resolve the verbal instructions some managers may give you. Hopefully, you can use this blog entry to open dialogue in your firm to address  how serious it is that all pertinent documents and instructions be placed where they belong in activity logs. Adjusters need to make sure their managers are willing to “go out on a limb” when instructing them and they need to make sure their files hold up under file review so the use of instructional management comments aren’t necessary. If you are having trouble with a  manager unwilling to log their comments, you might approach a manager with your adjusting firm and share this blog with them  so they can then pass this information on to someone with the carrier so you aren’t the subject of such blog entries and discovery material.

Log notes are an important part of the discovery process. For example, it is not appropriate or good claim handling practice to put the common first contact entry as “called insured, made appointment for X date”. There should be much more discussed in your first conversation such as severity code issues which might involve the need for additional living expense advances, temporary emergency repairs to tarp a roof, and much more. If you are not familiar with requirements for good activity logs to protect yourself and the carrier you serve, you might be interested in Activity Log Self Study Guide, File order, and electronic document naming suggestions to improve your activity log submissions. There are generally accepted guidelines by carriers you need to be familiar with. Not only will good log notes improve the professional file appearance but will  also improve the timelines often used in court against adjusters by logging all appropriate entries in the proper format. It is very difficult to recall the specifics of your meetings and discussions years later should suit be filed on a case as with the multitude of Katrina cases now going to court two years after the fact. Just ask yourself reviewing your log if it is a complete chronology of file events and if it supports the claim file decisions as a stand alone document from initial coverage review through your final settlement recommendations without the need to refer back to another single document in your file.

We thought along the lines of many of you that you could merely assume log note entry training could get a mere mention in your training sessions. That is not the case. During our online 40 hour Fundamentals of Claims class, we have mock claim scenarios set up with sample activity logs and trainees must complete activity logs based on the circumstances in the stated scenario. I can assure you having taught this class for the past 1.5 years, it is not a simple matter of common sense. Without your training and instructions as adjusting firms and carriers, it is not unusual to see even the most experienced adjuster skimping on their activity logs. As we teach the new adjusters, you will see many improper logs when reviewing reassigned files that may have made it through the channels during peak storm activity. The Katrina suits and links above clearly show we need to all improve training in this area. 

Good log notes are one aspect of the file that differentiate a great adjuster from the average.Managers recognize who is  capable of handling complex claim issues thus they are selected for clean up duty to handle reopen files. Any adjuster who has stayed behind for clean up can attest to the fact that it is very difficult to follow behind an adjuster on  reassigned files when they did not document authority extended, pending items, coverage issues and other important discussion details.

Please help us end the improper use of post it notes and other verbal instructions so we never have to view this topic in the perception of the public again! As NIKE says “just do it”…….if it happened log it…period.

Watch for our future  blog on the limited file review practice consisting  only of  a random sampling of closed files being reviewed that will track along with other file requirement discussions showing a smart carrier will not just decrease managers to save on expenses when the reality is it is just moving the claim expense elsewhere in the adjustment expense ratio to defense costs for bad faith claim handling suits…..or is it? We’ll explore the topic and report our findings soon.