Louisiana Citizens Insurance settles overhead and profit case for $23 Million

August 25, 2010

We continue to hear more about overhead and profit cases in the claims litigation arena. We had previously written about 3 seperate overhead and profit issues in this prior blog entry:

http://motorage.search-autoparts.com/motorage/article/articleDetail.jsp?id=684270

We received the news today that Citzens in Louisiana settled overhead and profit claim litigation claims for $23 million dollars. Here is a link to the article in the Claims Journal today:

http://www.claimsjournal.com/news/southcentral/2010/08/25/112736.htm


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

March 20, 2009

 

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

http://slabbed.wordpress.com/2009/03/17/anita-lee-reports-from-team-rigsby/

 

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

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


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

March 3, 2009
 

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

March 3, 2009

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/


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

August 7, 2008

 

 

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


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

June 26, 2008

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

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

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

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

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

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

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

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

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

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

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

State Farm’s Katrina response updates- click here

Insurance Coverage blog –                     click here

Ya’ll Politics blog                                –  click here

Folo- blog                                            – click here

Slabbed- blog                                       –click here

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

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

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

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


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

March 6, 2008

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

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

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

Sun Herald March 5, 2008 story: click here

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

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

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

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

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

Update 3:25 pm CST 3/6:

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


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

February 23, 2008

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

Google Web Alert for: Kerri Rigsby

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

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

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

Senate Concurrent Resolution 574

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

February 20, 2008

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 :

Reality takes a holiday on High Street

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

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:

Is this guy for real?
by Alan Lange
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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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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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Update on State Farm motion to disqualify Katrina Litigation Group

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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

February 7, 2008

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)


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

December 18, 2007

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

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

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

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

*********

Here’s the Scruggs webpage:

http://www.scruggskatrinagroup.com/state-farm-on-the-defensive/index.php

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

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

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

****************  

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


Branch Consultants vs Multiple Insurers and Adjusting Firms Whistleblower case thrown out by Judge today!

October 17, 2007

Here is breaking news on the Branch Consultant case which is the case involving 4 unnamed adjusters alleging under the False Claims Act that a multitude of carriers and multiple independent adjusting firms moved wind damages to the flood program improperly charging them with wind damages by attributing the damage to flood.

Here is the news article today on this case indicating the judge threw out the case.

http://www.iht.com/articles/ap/2007/10/17/business/NA-FIN-US-Katrina-Insurance.php

Here is a 2nd article that came out tonight which reveals for the first time that I have seen in any articles the name of one of the adjusters:

“Kanner said that he believes that the only hope of a real investigation of possible overbilling of the National Flood Insurance Program is for someone in Congress to invite his key adjuster, Max Johnson, to testify about his findings and demand to know why the Justice Department and the Department of Homeland Security, which is in charge of the flood program through the Federal Emergency Management Agency, isn’t doing more. ” Read the rest of the linked article for additional comments by Branch’s attorney, Mr Kanner.

http://blog.nola.com/tpmoney/2007/10/whistleblower_lawsuit_alleging.html

* Note this link above also discloses many more reasons why Judge Beer dismissed the case because of the Rigsby/Renfroe/State Farm case. Simply interesting for those of us in the adjusting community. This link is a must read. Also from this link you’ll see a list of the carriers and adjusting firms that were named in the suit but read farther down in my blog entry for the article that says Allied adjusting firm was the 5th adjusting firm also named in the suit:

“The Branch case involved Allstate Insurance Co., State Farm, Liberty Mutual Fire Insurance Co., Fidelity National Insurance Co., Fidelity National Property and Casualty Insurance Co., American National Property and Casualty Co., American Reliable Insurance Co., Standard Fire Insurance Co., Pilot Catastrophe Services Inc., Crawford and Co., NCA Group Inc., Simsol Insurance Services Inc., and Colonial Claims Corp.

The Rigsby case was filed against State Farm, Allstate, Nationwide Insurance Co., USAA Insurance Co. , Forensic Analysis Engineering Corp., Exponent Failure Analysis, Haag Engineering Co., Jade Engineering, Rimkus Consulting Group Inc., Structure Group, Renfroe and several individuals.”

I hope Rossmiller’s blog  provides more in depth review of the activity today and links to the court documents. I’ll post more information as other news is released on this case.

Here you will find some links to a history of articles on the case and the court documents:

US Attorney won’t intervene in the case:

http://channels.isp.netscape.com/pf/story.jsp?floc=FF-APO-1333&idq=/ff/story/0001%2F20070531%2F1734614259.htm&sc=1333

May Times- Piscayne article “Insurers accused of overbilling the federal Government”

http://blog.nola.com/times-picayune/2007/05/whistleblower_suit_accuses_ins.html

June article (not part of this case but related) saying Government Accountability office (GAO) did not find problems alleged:

http://blog.nola.com/times-picayune/2007/06/flood_insurance_relies_on_priv.html

Just totally for the human interest of it..here’s Kanner’s picture- the attorney who represented the whistleblowers:

Here’s Kanners profile/picture:

http://www.kanner-law.com/CM/Custom/AllanKanner.html

I found the Kanner Law firm website- note on his publications page he sites a forthcoming article on Property Damage Claims and Business Interruption losses. While there are links to many cases they have handled, I don’t find one for this suit:

http://www.kanner-law.com/CM/Custom/TOCPublications.html

Dr Michael Birzon’s of the University of Central FL’s earlier blog on the case:

http://blog.360.yahoo.com/blog-4lk2FhszcrRr.5PFKQg9lJQ-?cq=1

The earlier articles above didn’t name the 5th adjusting firm but this article does list Allied as the 5th adjusting firm and goes into much more details on the fines:

We now have the 5th name in this National Underwriter article- Allied out of Ft Lauderdale:

http://www.propertyandcasualtyinsurancenews.com/cms/nupc/Breaking+News/2007/05/31-FLOODSCAM-dh

There is much more in this article also about 8 billion in fraud and 11,000 fines,etc…

Here’s a 2nd article that listed Allied Adjusting:

http://www.propertyandcasualtyinsurancenews.com/cms/nupc/Templates/website/PrinterFriendly.aspx?%7B79E60F75-0D0E-49FF-9FEF-D1E9F993470E%7D

Next was the important action in July 2007 by Judge Beer’s requesting the US Justice Department become involved:

http://blog.nola.com/tpmoney/2007/06/judge_in_whistleblower_case_de.html

I found the article specifying how much these whistleblowers stood to gain- here is what it says so if the federal government had gotten involved, they would get reduced fees but it would still be a huge windfall to these whistleblowers due to the extent alleged to be involved:

“If whistleblowers are successful in pursuing the suit without the U.S. attorney’s intervention, they could be awarded as much as 30 percent of the proceeds if the suit is victorious. If the U.S. attorney’s office decides later to take over the investigation and the effort is successful, the whistleblowers’ take is reduced to 15 percent to 25 percent of the proceeds, Dugas said, because the government is the one doing the heavy lifting.

Under the False Claims Act, anyone who knowingly submits fake bills to the government is liable for three times the amount of damages sustained by the government, according to the Branch suit. There is also a civil penalty. ”

http://www.nola.com/timespic/stories/index.ssf?/base/money-3/1180597383262250.xml&coll=1&thispage=4

It’s on page 4 of this 6 page story.

Here is a link to the original complaint filed:

http://www.insurancecoverageblog.com/Branch%20Consultants%20complaint.pdf

Here was an article coming out of Mobile, AL quoting Pilot Catastrophe Services attorney on the case:

http://www.al.com/news/press-register/index.ssf?/base/news/1181467015194040.xml&coll=3&thispage=1

Congressman Gene Taylor’s website comments on the allegations of carrier abuse:

http://www.house.gov/genetaylor/OIHearing.Docs.htm

Another June article out of LA on the reliance on private insurers involved in flood:

http://blog.nola.com/times-picayune/2007/06/flood_insurance_relies_on_priv.html

This July Claims Journal article advised Scottsdale Insurance had been dropped from the suit:

http://www.claimsjournal.com/news/national/2007/07/02/81384.htm

Here was a July Bloomberg.com article quoting several other carriers involved in the suit:

http://www.bloomberg.com/apps/news?pid=20601203&refer=insurance&sid=a9GhCOEreUzM

Forbes.com wrote a July 9, 2007 article which said in part that the request for Justice Dept involvement was withdrawn ( link is no longer working but with Forbes subscription I’m sure you can find it based on topic and having date written-below is a quote from that article):

http://www.forbes.com/feeds/ap/2007/07/09/ap3895535.html

“A federal judge on Monday withdrew an order challenging U.S. Attorney David Dugas for not intervening in a whistleblowers’ lawsuit that accuses insurance companies of overbilling the federal government for flood damage from Hurricane Katrina.”

Here’s another article..sounds like the 2 folks who commented on the article are ready to shout “guilty” against the insurance industry as they have no understanding of the NFIP directives to carriers:

http://blog.nola.com/times-picayune/2007/07/federal_judge_withdraws_order.html

Now here’s some of the best info I’ve seen on the whistleblower case and what happened  explaining it all with links to the US attorney’s brief and the original request..very interesting:

http://www.insurancecoverageblog.com/archives/first-party-insurance-united-states-asks-judge-beer-to-vacate-show-cause-order-denies-judges-authority-to-order-us-to-join-whistleblower-katrina-suit.html

Here is the US Attorney’s brief filed Friday:

http://www.insurancecoverageblog.com/Branch%20Consultants%20memorandum%20by%20United%20States%20in%20response%20to%20show%20cause%20order.pdf

Homeland Security Report- 18 pages worth reading- their survey and findings on the files. Make sure to note that this says they have subpeoned the wind files from the WYO carriers:

http://www.insurancecoverageblog.com/Branch%20Consultants%20preliminary%20report%20of%20DHS%20on%20NFIP.pdf

Here is Branch’s response to the court on IG brief filed:

http://www.insurancecoverageblog.com/Branch%20response%20to%20U.S..pdf

Links to various states whistleblower acts on False Claims Act- I didn’t realize they varied by states- some allow only for False claims involving health issues- anyway- here is the state by state guidelines:

http://www.phillipsandcohen.com/CM/StateFalseClaimsLaws/StateFalseClaimsLaws152.asp

And here is other information on the False Claims Act in general:

http://www.phillipsandcohen.com/CM/Custom/TOCFalseClaimsAct.asp

That’s the entire history of articles I had on this case. I will post the pdf document for the dismissal as soon as it’s located. This is an important case for adjusters to study and learn from.  I hate to think of the dollars wasted on E and O and other defense costs involved by the adjusters, adjusting firms, and carriers who had been named in the suit. No one in the claims industry including policyholders had anything to gain on this case as the expense all results in higher premiums for us all down the road. Make sure you read what these whistleblowers stood to gain in the links provided above. The hard part is to know the adjusters  making the allegations were anonymous and still out there working for carriers and/or adjusting firms. Cases like this cost all independents jobs…..we’ve all watched as carriers have increased their numbers of staff adjusters since this case and the Rigsby/Renfroe/State Farm case also involved independent adjusters.

The initial news article posted at the top of this blog addresses the possibilty of an appeal so this may not be over yet. After 30 years in the property claims business, I find it very tough to believe the allegations in this case but by viewing all information posted publicly on the case, I’m trying to learn both sides of the issue and hope that you will also by viewing all information available to us  like that found in the links above. I would imagine I’ll have lots of supplemental comments to this blog as new information becomes available this week.

**************

**Update 10/18- I knew David Rossmiller of the Insurance Coverage blog would come through with an update on this. Here is today’s entry which ties all of this together for us and also mentions the connection with this case and the Rigsby whistleblower case:

http://www.insurancecoverageblog.com/archives/industry-developments-federal-judge-beer-dismisses-katrina-whistleblower-suit-in-louisiana-how-this-case-fits-in-with-usa-v-dickie-scruggs.html

Also, Dr Michael Birzon of the University of Central FL wrote the following blog last night found here:

http://blog.360.yahoo.com/blog-4lk2FhszcrRr.5PFKQg9lJQ-?cq=1&p=285

I’ll continue to update this throughout the day if any significant new things are learned. We only have 1 of the 4 adjuster’s names thus far and if I find the other 3 I’ll post it immediately.


Valued Policy Law Katrina decisions in the news this week and Fl Valued policy law updates since the 04/05 seasons

August 31, 2007

I wasn’t expecting to create a new blog entry until the holiday was over but we’ve had developing news this week on the LA Valued Policy law cases going through the court systems there. We also have several storm disturbances mentioned in the news so I want to be sure to distribute these updates before folks are going running out on any hurricane losses this season.

Here is a news article from the Associated Press put out by Advisen regarding the Landry vs Lousiana Citizens Property Insurance. This case originally went to court in December 2006 and ruled Citizens did have to pay policy limits on the case because of the valued policy law although it was another wind vs water case of attributing damage between these perils. However, Tuesday of this week, the 3rd Circuit Court of Appeals stated the following according to this news release:

“But the state 3rd Circuit Court of Appeal on Tuesday, in a 3-2 decision, set down this standard: if the Landrys can show that the “efficient or proximate cause” of the destruction was such covered perils as wind, rain or hail, Citizens would have to pay the full value of the property _ without a deduction for flood waters. To avoid that, Citizens would have to show the main destruction was caused by floods. ”

The article goes on to say that 3 weeks earlier a federal appeals court in NOLA affirmed a lower court ruling in favor of insurance companies saying the LA Valued Policy Law does not apply unless the damage is wholly attributable to a covered peril such as wind. I found the case referred to in this Claims Journal article citing the Chauvin vs State Farm Fire and Casualty case here. Here is another outstanding paper by the Tort Trial and Insurance Practice Law Journal (Winter 2007) which provides a short summary on the Chauvin case found on the Zelle firm’s site where you’ll find other excellent information on their articles page. This article is worth the time to read all 36 pages. You’ll find the Chauvin cases discussed on page 35/36 as well as other cases in FL we’ll discuss below. This Times-Picayne article also provides more details on the Chauvin’s case and comments from trial lawyer spokesman, Allan Kanner, hoping other cases will make it to the state Supreme Court for more favorable decision for policyholders. Here is also a “public opinion” blog on the ruling by an angry consumer over the issue here.

I checked the Insurance Coverage blog to see if there are any mentions of the new rulings and found this June 06 blog with links to both the FL Valued law and the LA valued law which also mentions another case I’m not familiar with. I’m curious what they’ll have to say now if they provide new information now that we have these additional new LA nd FL cases providing other new decisions.

Fl has also seen much news on the FL Valued policy law as a result of Hurricanes Ivan and Dennis. This article summarizes the well known Mierzwa vs Fl Windstorm case as well as the subsequent decisions by the courts on the FL 1st DCA 2006 cases of Vanguard Fire and Casualty Company vs Golman. That case involved allegations of breach of contract and bad faith and this article provides interesting reading to understand FL valued policy law changes. This is important as many independent adjusters have not worked cases in FL since Dennis in 05 and this is an 06 decision. (Vanguard is now in receivership by the way) The Zelle Property coverage update referred to above and again here reviews the Citizens Property Ins Corp vs Ceballo case holding that although the FL Valued policy law covers policyholders, they are not entitled to 25% of limits for Ordinance and Law coverage without proof of incurred expenses. This is found on page 35 of this document. Note that the information in this document goes on to say “that the court certified it’s opinion to the FL Supreme Court realizing that it’s opinion may be in conflict with another appellate court decision”..referring to the Mierzwa case.

It should be an interesting season with the continual new decisions coming out of the courts. From what I can best assess at this time, these decisions do seem to be upholding the intent of the policy contract provisions. I do wonder how many cases were settled on these valued policy law initial decisions as many of the articles linked to above indicate carriers did settle some of these cases out of court over the initial decisions. Hopefully, one of these great legal blogs we follow will address these decisions and provide their opinion as to what this all means for the 07 storm season in LA, FL, TX, and other storm prone regions. I hope adjusters will take the time when looking at these links to observe and read some of the many great blog entries and news articles free for our reading to better understand the claim issues.

Speaking of developing information- take a look before you sign off the blog at this new Ordinance and law information coming out of FL which indicates a new statute may be in effect in October 1, 2007 requiring extensive wind mitigation measures be done to homes in excess of $300,000 in designated zones. It sounds quite expensive as a roofing trade association is quoted as saying the extra cost to replace a roof would run about $6,000. I am very curious if the insurance agents are aware of this new potential expense and are offering increased Ordinance and Law coverage in the event an insured in a designated area must replace their roof subjecting them to this new requirement to do so. This will have a major effect on insurance damage estimates if carriers have to incur this cost. The trade association says they are working with Crist to try to postpone this. I sure hope so, the last thing we need in FL is another expense right now on top of the skyrocketing insurance premiums. This article I just came across today says that the majority of carrier rate increases have come in prior to the upcoming deadline and are averaging about 28% rate increase requests and some of the major carriers have not filed their requests yet. (Could this be due to Crist taking them all in for rate increase hearings as he recently tried to do ??? )You can imagine what the passing of this rule would do to Floridians in addition to the current rate hike proposals should this pass. It is still amazing that Citizens has a rate freeze through 2009. I’m running to Tn when those rate freezes are lifted! We’ve had the same neighbors going back 10 years and have lost several neighbors who have moved out of state after witnessing Katrina damages combined with what is going on in this state with property taxes and insurance for coastal residents.

I updated the stats on the earlier blog this week on new suits on the 2 year statute of limitations cases. According to the articles coming in, thus far about 2, 964 new cases were filed this week in LA. Here’s that blog if you want to read the updates.

**Update 9/1/07- After writing this blog I did in fact locate an updated opinion on the Insurance Coverage blog on the new decision in LA on the Valued policy law (it just wasn’t showing up in an internet search when I was researching earlier today). Here it is and it’s highly recommended reading for a legal opinion as to how this attorney feels this confuses the anti concurrent cause provision and what this this means to us. You read it and form your own opinion.


5th Circuit upholds anti concurrent cause provision as unambiguous

August 31, 2007

Here is an update located on the Insurance Coverage Blog along with the AP article and a pdf of the ruling all found in this blog entry. This was on the Nationwide vs Leonard case.

http://www.insurancecoverageblog.com/archives/first-party-insurance-nationwide-v-leonard-fifth-circuit-upholds-anticoncurrent-cause-provision-as-unambiguous.html

Below is a PDF of the ruling:

http://www.insurancecoverageblog.com/Nationwide%20v.%20Leonard%205th%20Circuit(2).pdf

The AP Story

http://www.sunherald.com/306/story/131448.html

I highly recommend reading this article by Attorney John Pappas “When is a flood a flood” to understand the terms in the insurance policy and court interpretations. There is a citation in this article on this Nationwide vs Leonard case.

Here is also a good news journal article on the issue from 8/15/07. I’m surprised we didn’t catch this ruling before!

Update 9/1/07-Here’s some additional articles. You won’t believe Gene Taylor’s reaction mentioned in this article:

The Sun Herald has a link to the pdf court docs I’m also posting in case the other link to another copy comes down:

http://media.sunherald.com/smedia/2007/08/30/18/Leonard_opinion.source.prod_affiliate.77.pdf

This news article quote from Congressman Gene Taylor’s Public director- I cannot believe his comments on “any carrier with anti concurrent language in their policy should be barred from participting in FLOOD” (as a WYO carrier)..I wouldn’t be surprised to see the carriers drop the WYO service- you can see the writing on the wall for the next flood storm! This spokesperson obviously has no understanding about insurance coverage or maybe it’s just too early in the morning to soak in the comments today!

http://www.sunherald.com:80/278/story/131328.html


Statute of Limitations- Katrina 2 year anniversary brings deadline to file LA suits

August 29, 2007

The 2 year anniversary of Katrina  is today while the LA statute of limitations came and went yesterday which was the deadline to file Katrina lawsuits in LA by insureds.

LA had extended their statute of limitations on property claims from 1 year to 2 years following the Katrina storm damage. Yesterday was the last day for insureds in LA to file suit. AL and MS have different terms with AL with a 6 year limit and MS with a 3 year according to the chart below so it may still be years that we continue to see new litigation. The chart also shows a 2 year property damage statute in TX (Rita claims). We do not yet know if there were a mass number of suits filed or not this past week in LA. We will report back on that when information becomes available.

Here is a good blog article by the Merlin group  giving a simple explanation as to what that means for insureds on their claims in LA as well as from an attorney’s perspective. They point out, as I did in the Citizens blog on the task force last week, about the 5 year statute of limitations in FL which a task force board member indicated he wanted to reduce because of the long tail on  claim file reopens. Click here for that blog. The interesting thing is that just because an insured can no longer file suit on a case, does not mean that a carrier will refuse to take a look at a claim request to reopen a file for supplemental damage, it simply means the insured no longer can file suit on the case.

Don’t mistake this for their handling of a newly reported loss at this late date. Claims with late reporting barring unusual circumstances are always handled under a Reservation of Rights while the cause of the reporting delay is investigated with a denial in order for late reporting if the investigation determines the carrier’s right to inspect a loss and investigate the claim have been prejudiced by the late reporting.  Here is a good article written about liability claims but explains reservation of rights letters and provides very good instruction for completing one. The Citizens 2007 Claims Procedure manual also has some ROR sample forms as does a link in my blog on  Scruggs  about the 242 carrier exhibits which contains many actual ROR letters sent out on coverage issues if you need to see  samples of finalized ROR letters.

You might also be interested in looking at the actual FL statute of limitations which does not just pertain to insurance claims but to other actions such as 1 year for a lien to be placed on real property for services or material performed(such as a contractor may do if an insured fails to pay the bill).

Here is a good article explaining both the Statute of Limitations and the Statute of Repose if you do not know the difference. This next article here gives general guidelines on the number of years different statutes run while this last article gives you a chart for all 50 states. An adjuster needs to make sure these are up to date stats before applying them to a particular loss. Make sure to note that there are different statutes for different kinds of losses such as an injury versus a property damage loss. Other factors such as federal or state laws will govern the proper limitation period as the articles linked to above explain. This explanation  from FL on “tolling” a statute and things to consider when dealing with minor children is also good information to know as to when the statute “clock” stops running on various issues.

Here is also information on the federal statute of limitations under the Federal Tort Claims Act that pertained to the Katrina Canal Breaches Consolidated litigation.

The Merlin blog points out some issues in MS causing delays there and here is an article coming from Alabama about FEMA grants and the Increased Cost of Compliance allowances to elevate a building in a flood zone there. It is hard to imagine that two years later they are just working on raising homes in the damaged zones. Anyone driving through MS in places like Biloxi can see the reconstruction problems abound as demolition has not even begun in many cases on the coast. The Fema trailer camps break your heart when you realize those folks have been living basically on a concrete pad with wall to wall campers not much more than the size of a small one or two man tow camper.

As these anniversaries approach bringing with them state statute of limitations, do not just assume you are to deny a claim or not respond  and timely answer a suit through your carrier’s counsel. These are major issues you need to immediately bring to the attention of your claim manager for direction and guidance on claim handling for any loss approaching or surpassing the state statute of limitations.

I’ll let you know as soon as we start seeing the numbers of new suits alleged to be filed with this week’s deadline in LA. Lest we forget while thinking of this two year anniversary, there were 2,000 deaths, 800,000 homeless, and extensive damage as this anniversary article summarizes. It puts insurance policies and statutes of limitations in perspective. In the insurance world they are very important but to the Katrina victims the coverage issues and statutes just bring a new storm of pain and trauma as they learn of these problems after the storm. I’ll end today’s blog with this insurance article summarizing the stats from both Katrina and Rita with numbers. The number of files that may be effected by the statute of limitations is a very very small percentage of the claims settled as you can see. One can certainly appreciate the comments of this news organization regarding trial lawyers “self serving fiction” spouted in unfounded comments about insurance contracts/claims when viewing the REAL numbers of claims which are unsettled.

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Update 8/30- This article is being added as it gives an update on new suits filed which seems a minor number in this article. Also note this report indicates there are a few deadline changes allowing for an extra few days to file.

Update 4:30pm 8/30/07- Here is a new article indicating brisk activity at the courthouse

Update 10:20 Pm 8/31- According to this new article– 2,984 new suits were filed in the last week just in the two jurisdictions mentioned in this article- and these are unrelated to the levee cases which are also mentioned in this new article.


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

August 24, 2007

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

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

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

6pm CST update 8/24/07- 

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

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


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

August 22, 2007

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

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

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

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

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

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

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

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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?

August 7, 2007

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.