qui tam attorneys need stamp – response puts State Farm in a box ready to mail!

If there was any doubt that State Farm’s attempt the exclude all testimony of all four expert witnesses for the Rigsbys was the only choice the Company had short of surrender, the qui tam attorneys took care of that when they responded in opposition.

The four similarly titled documents appearing on the docket yesterday share a set of common elements: the requirements of Rule 702 Federal Rules of Evidence; the standards for an expert witness set by the Supreme Court; the Fifth Circuit’s recognition that cross-examination is the appropriate place to challenge the bases of an expert’s opinion; and, facts to refute State Farm’s argument that statements made by Kerri Rigsby in a deposition demonstrate that it lacked the scienter necessary to commit fraud.

Rigsby testified that, at the time of her initial inspection, she believed that the McIntosh home had sustained $250,000 in flood damage. But she also testified that she had believed State Farm’s false instructions that all of the homes along the Gulf Coast had been damaged by water before Hurricane Katrina’s most destructive winds arrived. See Depo. of K. Rigsby dated May 1, 2007, at 239:16-240:7. She further testified that State Farm instructed its adjusters to hit the limits of flood policies, even if they had to inflate a home’s square footage or exaggerate a home’s damage to do so. See id. at 150:21-24; 213:20-214:9. Finally, she noted in the same deposition that she should not have approved the payment. See id. at 238:6-17. Essentially, State Farm’s argument is that,because it failed to train adjusters like Kerri Rigsby to correctly identify flood damage, it should be shielded from its own fraud.

The genius of the Relators’ approach is the way the interdependent relationship of the contribution of each expert works together – creating the four sides of the box containing State Farm’s defense.  In other words, this is of necessity a long post as the findings of any one of the four experts provides  context for the findings of the remaining three.

Relators Opposition to Defendants’ Motion to Exclude all Testimony by Dr. Ralph Sinno

State Farm’s attempted impeachment of Dr. Sinno’s reliability, however, presents scant evidence from the record, and what it does present is taken out of context or flatly mischaracterized. In its motion to exclude Dr. Sinno’s testimony, State Farm attempts to usurp the role of the fact-finder and consistently advances arguments that would only be proper on cross-examination, not a motion to exclude.

Indeed, Dr. Sinno’s credentials significantly exceed those of State Farm’s corresponding expert, Mark Watson, who has no advanced degrees, no special experience with hurricanes or the effects of hurricane-force winds, and was a pupil in Dr. Sinno’s engineering program at Mississippi State University. See Expert Report of Mark Watson…Appendix Five (listing education and work experience).

…Given the very clear definition and explanations that Dr. Sinno gave, State Farm’s derogatory claim of “semantic gymnastics” represents a blatant mischaracterization, made even worse by its own conduct. State Farm attempts to redefine “uplift” and criticizes Dr. Sinno for not defining the difference between “uplift forces” and “uplift failure.” Yet State Farm does so without ever itself defining “uplift forces” or “uplift failure.” Dr. Sinno very thoroughly explained his use of the concept of “uplift forces.” If “uplift failure” is structural damage caused by “uplift forces,” Dr. Sinno has explained both were present. Thus, Dr. Sinno’s explanation of uplift remains a valid basis for his conclusions…

Dr. Sinno’s report documented the reasons why the structural damage to the house was caused by wind and not water. He first noted that the catastrophic effects of the recorded wind speeds, which hit the McIntosh home with particular force because of the lack of obstructions in the direction of the strongest winds and the large open windows that allowed the storm to penetrate the envelope of the house and wrack its structure. Dr. Sinno also noted that the documented level of water and the absence of wave action could not have caused structural failure…

State Farm’s argument relies on its own experts’ calculations of the water forces involved. But as Dr. Sinno noted, those calculations are fatally flawed because they assume the water hit the home like a tsunami, rather than slowly flooding the home.

State Farm argues that Dr. Sinno ignored the fact that the water surge may have caused washout. That argument is incorrect.  Dr. Sinno acknowledged that water did infiltrate the house and “can be a serious threat to the building’s curtain walls, interior partitions, and contents of a residential house if the house is severely inundated by the water surge.”…In his report, he noted that “[t]he water surge could have added to the damages of some partitions on the lower level and moved personal belongings and destroyed some furniture that were already damaged by wind forces.” And he acknowledged, in his deposition, that the washout did affect the property…

State Farm provides a transcript from Fowler v. State Farm…to support its argument that Dr. Sinno’s testimony should be excluded. In Fowler, the proffered expert was using calculations from other cases and not applying them to the facts of Fowler. Dr. Sinno’s calculations were not from other cases, but were, instead, from the ASCE-7 – a publication commonly relied upon by experts in his field, as well as State Farm’s own experts. In contrast to Fowler, Dr. Sinno applied the calculations to the McIntosh house. Further, Dr. Sinno did not do the calculations “in his mind” or fail to disclose, in his report, the information that he used to do his calculations. On the contrary, he identified the computer modeling software he used and fully disclosed the information and variables he relied upon to reach his conclusions…

Dr. Sinno’s work stands in stark contrast to that performed by the Fowler expert. Dr. Sinno fully disclosed the facts upon which he relied and offered much more than subjective opinions. Additionally, although his opinion on valuation has not been attacked by State Farm, Dr. Sinno admitted the constraints of his expertise by indicating that he could not place a dollar amount on the damages suffered by the McIntosh house…He left that work to an expert in that field, David Favre.

Relators Opposition to Defendants’ Motion to Exclude all Testimony by David J. Favre

State Farm’s main contention, and the focus of much of the memorandum in support of the motion to exclude, is that Mr. Favre did not sufficiently explain the methodology he used to reach his expert opinion. In reality, however, State Farm takes issue with Mr. Favre’s conclusions, not his methodology. State Farm does not challenge the utility of  the Xactimate software program that Mr. Favre used in his analysis of the cost of repair to the McIntosh house, nor does State Farm dispute Mr. Favre’s qualifications as a testifying expert.

State Farm’s efforts “to inflate or exaggerate or the amount of the legitimate flood insurance claims that they submitted” are the central issue currently before the Court… State Farm hit the limits of the McIntosh flood policy with its payments; the Favre Report demonstrates the amounts that actually should have been paid. As such, the Favre Report provides the factual underpinnings demonstrating State Farm’s fraud.

Second, the Favre Report identifies some of the flaws in State Farm’s adjustment of the McIntosh claim. The use of Xactotal, which calculated flood damage based solely on the square footage of a house, was improper in this situation. The Favre Report demonstrates the methodology that should have been used, identifying each element in the house damaged by flood and assigning a cost for repair.

The McIntosh home received no more than 2.1 feet of flood water during Hurricane Katrina. State Farm’s own expert, Robert Dean, admitted in his report that a FEMA high water mark immediately adjacent to the McIntosh home registered 18.6 feet above sea level, and that the McIntosh home’s first floor was 16.5 feet above sea level.

State Farm’s experts have attempted to claim that three feet of waves somehow were superimposed on that two feet of flood water, but the FEMA report cited by Dean explicitly noted that the water level at the McIntosh home “[was] not complicated by other factors such as waves.” (noting that water line at site of McIntosh home was “surge-only” water with no wave action present). State Farm’s experts cited the FEMA report.  They knew its conclusions. And yet they continue to assert a false and fictitious five-foot water line without any foundation…

State Farm criticizes changes Favre made to a prior report he submitted in McIntosh v.State Farm. According to State Farm, Favre used a different Xactimate price guide and altered some of the dimensions of rooms in the McIntosh property…Yet State Farm does not identify the source of the new data: State Farm’s own homeowner’s claim…

Favre’s current report uses the same Xactimate price guide State Farm found appropriate in adjusting the McIntoshes’ homeowners’ claim and the exact dimensions measured by Cody Perry, and it incorporates information about the actual layout of the McIntosh home, including the location ofclosets, and the absence of carpet in some areas. State Farm cannot reasonably attempt to exclude Favre for basing his report on information it itself provided. If it wishes to impeach Mr. Favre for relying on its own data, it may do so on cross-examination before the trier of fact…

But Mr. Favre’s McIntosh report necessarilywas based on incomplete and sometimes inaccurate information, since he did not have access to the flood and homeowners’ claim files that provided actual room dimensions or Dr. Sinno’s expert report explaining the actual cause of most of the damage; that new information, which is based primarily on State Farm’s own files and adjustments of the McIntosh claims, accounts for most of the changes in his methodology.

Moreover, Mr. Favre’s assignment in this case is materially different; rather than calculating the total cost necessary to rebuild the home to its original specifications, as he did in McIntosh, Mr. Favre now is assigning costs to the limited damage caused by flooding. That significant difference accounts for the remaining “inconsistencies” State Farm alleges.

Relators Opposition to Defendants’ Motion to Exclude all Testimony by Dr. Keith Blackwell.

State Farm states that Dr. Blackwell is unqualified to offer any opinion “on the cause or extent of damage to the McIntosh house.” … But that argument is totally irrelevant — Dr. Blackwell has never attempted to offer an opinion on the cause or extent of damage to the McIntosh house. Dr. Blackwell has offered his expert opinion on the timing and extent of the destructive meteorological forces that occurred in the vicinity of the McIntosh property on August 29, 2005.

The “cause” and “extent” of damage at the McIntosh house is the proper purview of structural engineers and other professionals experienced in assessing damage such as Dr. Sinno and Mr. Favre. Dr. Blackwell’s meteorological testimony is, in turn, directly relevant to that evidence. Indeed, State Farm implicitly recognizes that fact; two of its own experts, Dr. Robert Dean and Dr. Kurtis Gurley, provided expert reports on similar subjects…

State Farm argues that Dr. Blackwell’s site-specific opinions are based upon an unreasonably limited universe of data. In essence, State Farm attempts to define for Dr. Blackwell what data he can use. State Farm also criticizes Dr. Blackwell’s opinions on the timing of the storm surge…  Notably, State Farm does not argue that Dr. Blackwell’s opinions are inaccurate or incorrect. Instead, it argues that Dr. Blackwell’s opinions are “mere lip service to the magnitude of the storm surge or the waves superimposed atop the surge[.]”

But Dr. Blackwell never addresses those points; his report notes that because of the double-eyewall nature of Hurricane Katrina, “strong hurricane-force winds began affecting the McIntosh property many hours before the center of the storm arrived on the Mississippi coast.”  Every expert in this case, including State Farm’s own experts, reached the same conclusion. State Farm’s efforts to attack Dr. Blackwell’s methodology on a point he did not make, using his results that are indisputably accurate, cannot succeed…

The Rigsbys have proffered the testimony of Dr. Keith Blackwell (“Dr. Blackwell”) to describe the scope and nature of the destructive meteorological forces that impacted the McIntosh property during Hurricane Katrina. Dr. Blackwell does not attempt to describe the effects of those forces on the property; Relators have presented expert reports from a structural engineer – Dr. Ralph Sinno – and a building contractor and insurance adjuster – Mr. David Favre – to describe the specific effects of those forces on the McIntosh property.

Relators Opposition to Defendants’ Motion to Exclude all Testimony by Dr. Patrick Fitzpatrick

State Farm states that Dr. Fitzpatrick is unqualified to offer any opinion “on the cause or extent of damage to the McIntosh house. But that argument is totally irrelevant — Dr. Fitzpatrick has never attempted to offer an opinion on the cause or extent of damage to the McIntosh house. Dr. Fitzpatrick has offered his expert opinion on the timing and extent of the destructive meteorological forces that occurred in the vicinity of the McIntosh property on August 29, 2005.

The “cause” and “extent” of damage at the McIntosh house is the proper purview of structural engineers and other professionals experienced in assessing damage such as Dr. Sinno and Mr. Favre. Dr. Fitzpatrick’s meteorological testimony is, in turn, directly relevant to that evidence. Indeed, State Farm implicitly recognizes that fact; two of its own experts, Dr. Robert Dean and Dr. Kurtis Gurley, provided expert reports on similar subjects…

Dr. Fitzpatrick’s report is based on the Hurricane Research Division’s satellite images and airborne radar, National Weather Service radar, drop sonde data, buoy data, and an Ingalls Shipyards’ anemometer, as well as the Hurricane Research Division’s H*Wind analysis…

State Farm’s efforts to criticize Dr. Fitzpatrick have a fundamental and fatal flaw: State Farm’s own expert reached conclusions effectively identical to Dr. Fitzpatrick’s. On the key element of his report, the timing and speed of the storm’s peak winds, both Dr. Fitzpatrick and State Farm’s expert, Dr. Kurtis Gurley, agree that the winds reached a maximum speed of 120 mph at around 9:30 a.m. on the morning of August 28, 2005…In light of that fact, State Farm cannot credibly contend that Dr. Fitzpatrick’s data or methods are unreliable.

Dr. Fitzpatrick, like State Farm’s own experts, relied on the extensive weather data collected during Hurricane Katrina, especially the H*Wind analysis. But the data provided by H*Wind necessarily is partial and incomplete, and Dr. Fitzpatrick’s deposition explained why.

State Farm goes to considerable lengths to attack Dr. Fitzpatrick’s methodology, butthose attacks misrepresent and mischaracterize Dr. Fitzpatrick’s report. Moreover, State Farm’s own expert corroborated Dr. Fitzpatrick’s conclusions on wind speed, while a report from the Federal Emergency Management Agency (“FEMA”) confirmed his conclusions on flood height  and force (while simultaneously conflicting with State Farm’s expert’s report).State Farm takes issue with Dr. Fitzpatrick’s assertion that the high water mark of 18.6 feet reflects “wave action of 1 feet or less superimposed on the surge.” But objective third-party evidence confirms that fact, and the video “evidence” on which State Farm relies has no probative value.

Data recorded by FEMA demonstrates that wave action at the McIntosh site was insignificant. A study relied upon by State Farm’s own expert, Dr. Dean, identified the water height at the McIntosh home as “surge-only,” a reading “that is not complicated by other factors, such as waves.”

FEMA, an objective third party with no interest in this litigation, confirmed Dr. Fitzpatrick’s analysis and concluded that wave action at the McIntosh property was insignificant. State Farm has offered no credible evidence to dispute that fact.

State Farm also provided pictures captured from videos taken by a neighbor of the McIntoshes, Mike Church (“Church”). Church took the videos around 9:00 a.m. in the morning, and State Farm claims that the videos contradict Dr. Fitzpatrick’s conclusion that the waves at the McIntosh property were less than one foot in height…the videos were taken at 9:00 a.m., during or near the storm’s peakwinds. Indeed, State Farm notes that the videos were taken at a time when flooding had reached “only half of Katrina’s maximum storm surge.”  But that fact cuts strongly against State Farm’s interpretation.

At 9:00 a.m., according to both Fitzpatrick and Gurley, the surge was still rapidly rising and the storm’s winds were nearing their peak, but the surge had not yet reached the McIntosh property…By the time the surge actually reached the walls of the McIntosh property around 11:00 or 11:30 a.m., wind speeds had dropped by at least a quarter, and the water began receding within an hour or so.  The Church videos offer no evidence of the actual conditions existing at that time, and thus have no bearing on Dr. Fitzpatrick’s conclusions.

Dr. Fitzpatrick noted that the storm surge in Biloxi Bay was at the Category 5 “catastrophic” severity that causes “[m]ajor damage to lower floors of all structures less than 15 feet above sea level.”  State Farm somehow concludes that “[t]hat description fits the McIntosh house to a tee.”  But the McIntosh home’s first floor was 16.5 feet above sea level, as its own experts noted.  And the McIntosh home was more than a mile inland from Biloxi Bay, sheltered by a large stretch of land. General observations about the effects of storm surge have no bearing to the conditions actually experienced at the McIntosh home.

Thus, Dr. Fitzpatrick’s general observations about the effect of the effects of storm surge on low-lying properties near open water, although accurate, neither relate to nor contradict his report on the McIntosh property. His specific observations about the McIntosh property have been corroborated by an independent third party...

As an initial matter, the Relators must prove that the damage to the home was caused by wind rather than water before it can prove that State Farm knowingly, deliberately, or recklessly disregarded that finding. Dr. Fitzpatrick’s report and testimony serve as part of the basis for reports by Dr. Ralph Sinno and Mr. David Favre on that subject.

All I will add – and only as a point of pride – is Sop did indeed earn his Ph.D. in Hurricane roof rafting –  his contention that the surge did not arrive until around 11:00am with no significant wave action at the McIntosh property is verified!