I had to laugh when I was alerted by a reader to this story, it was her live blogging from the US Court in Natchez that landed Bellesouth on the cyber map here in Mississippi. It was her insistence that Hood did not do badly on the witness stand under Robie’s questioning and that he still did indeed have litigation ongoing against State Farm that put her on the outs with some folks who thought they knew better. In my world of finance blogging it is far better to be right and on the outs with the know it alls about a stock than wrong and losing your ass. Congratulations Belle.
Also we congratulate Jim Hood who has been viciously attacked by the combination of State Farm, Scruggs haters and the Mississippi GOP. Today’s announcement shows he stood firm and with resolve to do what was right for State Farm policyholders even in the face of the withering political criticism. I hope he enjoys the well deserved credit for the additional $74 million he got for the slabbed.
Here is the breaking story from Anita Lee:
Attorney General Jim Hood and State Farm have settled a lawsuit Hood’s office filed against the company.
Hood said State Farm has paid policyholder an additional $74 million for Hurricane Katrina claims, meeting requirements that company had agreed to with his office in January 2007.
Hood sued the company because he believed it was failing to live up to that agreement. The agreement called for a claims re-evaluation process that would have been overseen by the federal courts. It also required State Farm to pay policyholders whose homes were completely destroyed by Katrina a minimum 50 percent of their coverage.
Because State Farm failed to get that federal supervision, Hood sued. He now says a review of settlements State Farm subsequently reached with policyholders showed the company met the 50 percent requirement.
He said if the courts had supervised the claims re-evaluation, he believed policyholders would have received up to $476 million.
As part of the settlement, State Farm has agreed to notify 148 policyholders who had only slabs or piers after the hurricane that they can have their claims re-evaluated as well.
So far, these policyholders have not participated in the re-evaluation process or filed lawsuits against the company.
Hood folded but leave it up to his groupies here to paint this as some major victory.
Folded? How’s that? State Farm was not following the Court’s guidelines until he filed suit. Seems like it was George Dale that folded and left Hood to clean up the mess.
I don’t see how it’s anything other than a major victory for Hood, Sid, but I sure am interested in knowing why you think not.
Just because Rossmiller, Yall and Folo have been saying that for months does not make it true Sid. This entire deal reminds me of this quote by Judge Merrick Garland of United States Court of Appeals for the District of Columbia Circuit
I rather suspect this news stings in certain quarters because it again shows again how some events of interest to the slabbed were misrepresented by bloggers with axes to grind against Dickie Scruggs. While Lewis Carroll would certainly have been proud of the creativity behind such fiction passed off as fact, the slabbers knew better.
Time has a way of providing clarity to events. This is such an instance of that, especially considering the party line months ago was this whole business was kicked out of court and settled in State Farm’s favor with no further consequences to the good neighbor.
Nice try anyhow Sid.
sop
… also from the Barrister’s Tale –
But the Judge said he never had summed up before;
So the Snark undertook it instead,
And summed it so well that it came to far more
Than the Witnesses ever had said!
For a less worshipful view of the matter, go to Legal Newsline:
http://www.legalnewsline.com/spotlight/214612-state-farm-calls-ag-hoods-spin-on-settlement-perplexing
Recall, people, that there were two suits: the original, whose settlement collapsed when Senter killed it, and the June 2007 suit, in which Hood was pantsed by State Farm.
I believe that this is the dismissal of suit number 1, suit number 2 having been dismissed when Hood cried “uncle” last summer, after his unfortunate performance on the witness stand.
I think Sid had it right: Hood is ackowledging that State Farm did everything it said it would in the deal it originally offered to Commissioner Dale. Hood and Scruggs had dearly hoped to fashion a process that would let them feed off of State Farm for hundreds of millions of dollars. This is the end of those hopes.
So Hood ended up adding exactly zero to the deal, compared to what Dale got. Zero. Nada. Zilch.
I wonder if he looks back and wonders where it all went wrong?
The 148 that are getting letters would beg to differ Mr CG. They get what, an automatic 50% of limits tender right?
Legalnewsline are US Chamber of Commerce shills that never met a big insurance company they didn’t love. They have also constantly misrepresented the litigation down here.
I think everyone knows where it all went wrong, claimsguy. It was the settlement with George Dale – more on that later.
50% is better than zero. And since their loss is all flood and zero wind, 50% is a pretty good deal.
Leaving aside the obvious irony of you people calling ANYONE a “shill”, I offer you the Sun Herald’s assessment of matters, which includes the money quote where your current IC credits this deal SOLELY to IC Dale.
http://www.sunherald.com/pageone/story/731995.html
The day may yet come when Hood gets to take off his clown hat. This is not that day.
I’m glad you agree with me that Jim Hood’s announcement yesterday was indeed meaningful Mr Claimsguy.
If the Farm had done that with all their slab claims to begin with, slabbed wouldn’t exist and Jim Hood wouldn’t have sued.
Those 148 interest me greatly but for a completely different reason. Excluding claims admin expenses, to this point their claims represent pure profit to State Farm. The people at McKinsey and Comapny are no doubt very proud.
sop
Mr CG Dale’s re-eval process was BS. State Farm didn’t get serious about making their former policyholders happy until after Hood sued.
Even then the 148 slabs that did not get the good word still had to be hashed out (Belle e-mails they were working on that back in February when Dale was long gone). Neither Chaney nor Dale did that, Jim Hood did.
The two largest newspapaers in this State plus one of Jim Hood’s fiercest critics view this as most newsworthy for a reason. The fact both the C-L story and the S-H story printed reaction from the Farm and the GOP means the journalists who wrote them were interested in balance. We’re all for that here at slabbed.
sop
Dale didn’t get the numbers, Sop, I’m back on now as you can see and trying to finish the post and get it up.
You implicitly assume that SF actually owed the dollars they are now paying pursuant to the Dale Agreement. That is just that: an assumption.
To the extent that the claims were for homes that were destroyed by storm surge, then SF owed nothing, and are paying solely because the transaction costs and overall noise make not paying impractical. But that doesn’t make them covered claims. And it makes the dollars paid a loss to SF’s owners: their policyholders. (Remember, SF is a mutual, owned by its customers.) Extorting that money out of SF and its customers is nothing to be proud of.
Read thee articles about BP in Russia. Substitute SF for BP, LA and MI for Russia, and Scruggs for Putin, and you have a pretty accurate analogy for this situation. I see nothing here for the Gulf to be proud of.
I see nothing here for the Gulf to be proud of.</i?
Most certainly not Hood’s bungling of the whole matter from beginning to end.
You’re assuming they don’t owe it. The fact they are paying tells me what I need to know Mr CG.
Better late than never eh?
sop
SId, Hood made a big mistake letting State Farm pressure him into dropping the criminal investigation as a condition of their settling with SKG.
Once upon a time even State Farm acknowledged Jim Hood’s role in the settlement in a legal filing. I quote from pages 18 and 19:
Of course this refers to Woullard which eventually fell apart. Provisions resulting from those nogotiations included one I found on page 19 of the State Farm filing:
The problem with hanging around the lemonade spring too long is such historic facts tend to get lost in the shuffle.
When Senter wanted more policyholder protections built in the process (Judy Guice also spoke out against the proposed settlement) the deal fell apart. Hood had already dropped the cirminal investigation and the rest is history as they say.
Bottom line is we freely acknowlegde Jim Hood’s mistakes. The difference between the bloggers and SId Salter is SId will give credit when credit is due, even to Jim Hood.
Quote: “The fact they are paying tells me what I need to know Mr CG.”
Either you are unable to understand my point or you just don’t want to. SF paying what they are paying has absolutely nothing to do with the merits. Nothing.
It has everything to do with ending an unpleasant and expensive experience as cheaply as possible. It has to do with an assessment of the costs of litigating in a “magic jurisdiction”. It has to do with a reasoned assessment that the rule of law on the Gulf Coast is percarious.
What is ISN’T about is the merits. Those claims are flood claims. To the extent that the claimants are getting payments from policies that exclude flood, they are getting money extorted from an American business. They should be ashamed of themselves. If this happened in another country, we would accuse that other country of having an insufficiently mature legal sytem, and use phrases like “banana republic” or “crony capitalism” or the like.
Instead, the banana republic is Mississippi. Any insurance company in its right mind should charge an extra 20% in premiums just for stuff like this: knowing that in any significant dispute, it will be very difficult to get a ruling on the merits.
The problem CG is State Farm did not adjust thier claims after the storm so your point isn’t valid. They took the easy way dumping every claim on the NFIP when they could and denying every claim regardless of what the engineers told them.
Once they crossed the line into the realm of bad faith all bets were off and low and behold policyholders who could stick out the process in litigation have been collecting ever since.
The straw man you build sounds good at first and has been a staple of the insurance industry since the storm but it doesn’t hold up when the facts are presented.
Screwing policyholder after a large natural disaster isn’t anything new for State Farm as the jury verdict in Watkins v State Farm in Oklahoma City well illustrates.
All the players were there too, from Lecky King to Renfroe.
A house destroyed by a storm surge is what it is. There is nothing about any carrier’s claim handling that can turn it from a flood loss into something else.
Those that seek additional money are opportunists, pure and simple.
SOP:
Your decision to raise Watkins is interesting. Shall we pursue the logical chain that leads you to believe an OK tornado claim is relevant to Gulf Coast storm surge?
It sounds to me it is something like this:
1> Watkins had a loss
2> State Farm handled it badly
3. State Farm has or will have millions of other losses
4> Therefore, State Farm will handle the millions of other losses badly, too.
Did I get it right?
If not, care to parse your logic for me, so I can see where I went wrong?
Out of curiouslity what was the excuse for not paying after the Oklahoma City tornados?
State Farm could not have known flood caused all the damage because they did not properly adjust their claims. Even industry lawyer David Rossmiller will tell you wind damage that occured prior to flooding is a covered peril.
Instead State Farm took the the easy way out and dumped every claim they could on the NFIP and threaten to fire engineers who found wind damage.
Wind damage claims were paid all the way to the Tenessee line – everywhere but where the winds blew strongest here on the coast in fact.
My lying eyes have seen the checks State Farm now can’t seem to give out fast enough. Money talks and bullshit walks Mr Claimsguy.
sop
Why did Watkins have to litigate 7 years with the Farm to collect on a covered peril Mr Claimsguy? They didn’t even have storm surge to blame there. And it wasn’t just the Watkin’s family either CG, it was a whole group of State Farm policyholder that had to sue.
Watkins, Mullins, McFarland, etc etc etc etc all show a pattern of bad behavior on State Farm’s part. The kind of pattern that makes for a good RICO case in fact.
sop
Sop, sorry my computer connection is causing problems linking documents but there’s a wealth of information out there to back Hood up and I’ll post as much as I can as fast as I can.
On March 6, 2007, Commissioner Dale reached an agreement with State Farm to reopen
claimsguy, are you saying a slabbed claim is all water damage and no wind?
Claimsguy must really be a State Farm “claims guy.” He automatically concludes that winds equivalent to an F-2 or F-3 tornado had NOTHING to do with rendering a single home a slab. This is exactly how State Farm adjusted slab claims.
Silly, backward-ass, Mississippi and Louisiana folks, don’t you know that all a hurricane is comprised of is one giant wall of water?
You’ve got my real name and what I do for a living claimsguy. What is your name and for whom do you work?
George Dale posted today on Rossmiller’s thread on this topic Rick. Too bad Mr Rossmiller didn’t ask him how things were going these days at Adams and Reese.
Congrats to Dustin who admitted that Belle was right. Who else is interested in the facts rather than spin?
The fact is State Farm has done more to sully the reputations of property and casualty insurers than any entity inside or out of the industry.
One thing this saga has made clear to me is the insurance industry is incapable of taking out their own trash, prefering instead to crash and burn with State Farm. That is unfortunate.
sop
Claimsguys a pretty hard case, Rick, but my favorite one – real smart and a great blogger.
Sop:
I went and read Dale’s post. It’s so well-supported and insightful, I can only assume that his partner at Adams & Reese, Robert Wooley, must have helped him write it.
Maybe one of that blog’s loyal subjects can explain why it never so much as mentions certain allegations involving Allstate, Wooley and A&R. Does someone at that blog, or his firm, represent Allstate?