Judge Senter sends State Farm engraved invitiation to produce documents in Rigsby qui tam for his review

In the meanwhile, so I may know the outer limits of the potential claims involved in this action, I will require State Farm to submit, in camera, a list containing the name of the insured, the address of the property, and the amount of flood insurance paid, for all SFIP claims that meet the following criteria…

Clearly, Judge Senter thought his Order (August 10, 2009) was sufficient; but – well, his Supplemental Order Setting Deadline for State Farm’s in Camera Submission of List of Properties (September 11, 2009) speaks for itself:

On August 10, 2009, I entered an Order requiring State Farm to submit, in camera, a list of properties covered under its homeowners policies and meeting three specified criteria. State Farm has not yet responded to this portion of the Order, and I note that the Order did not specify a time-frame for the preparation and submission of this list. (emphasis added)

I find that setting such a time-frame is required in the interest of justice.

Accordingly, it is hereby ORDERED That State Farm Fire and Casualty Company shall submit the list called for under item number 6 in my order [344] of August 10, 2009, within thirty days of the date of this Supplemental Order, i.e. on or before the close of business on October 19, 2009.

Judge Senter obviously has mastered the art of diplomatic double speak – a credit to what some call good home training.  Note how gently he points out State Farm had time to file a second Amended Answer and organize a coordinated response from co-defendants Haag and Forensics (FACES); i.e., State Farm has not yet responded to this portion of the Order.

It would be fool’s folly to attempt to convince him the list was difficult to produce when there are documents at his disposal that suggest otherwise – Chip Merlin’s deposition of Stephan Hinkle in Illing v State Farm (August 9, 2009), for example:

Q. What type of information is provided to you on that periodic basis on the claims payment

A. Payments are broken down by peril and by facility.

Q. What do you mean when you say by facility?

A. Whether it was field handled or in office handled.

Q. And by peril what do you mean?

A. We’ve assigned certain perils to claims like wind storm or fire or vandalism or theft.

Q.  Katrina wind storm claims were assigned what type code number?

A. 35 and 36 which is wind.

Q. What’s 35 stand for?

A. Wind to building.

Q. And 36?

Judge Senter, no doubt, recalls that State Farm provided same day service in response to Judge Walker’s June 5 Order in Bossier v State Farm.   Apparently, he also recalled Judge Walker’s response came in a box and it took two months to complete the in camera review and asked for a list.

Best guess for no response from State Farm to date –  recent amendments to the FCA that apply to pending cases. Although always possible, it has never been easier to verify the accuracy of the information on NFIP claims that State Farm will submit on the list of properties meeting Judge Senter’s criteria no later than the19th of October.

11 thoughts on “Judge Senter sends State Farm engraved invitiation to produce documents in Rigsby qui tam for his review”

  3. Actually Hank Greenberg was first in line at the White House asking Bush for money. It would be a good thing except he didn’t use the money to do good for the consumers. He lined his pockets down in the islands with the 9-11 reinsurance program money he hit Bush up for after our Nations great tragedy in New York, Penn and DC.

    State Farm noticed and they organized a next time we HO insurance companies get a major CAT event we will hit the fed’s up for our own program to loot. It was Katrina which hit next and they implemented their plan. Get a federal charter and get a federal backstop for the HO market. Keep the rates the same and put the long tail risk on the fed’s. Bam Bam’s formula in action for making money in insurance. Lower your risk and keep rates constant or raise them.

    A funny thing happened on the road to Rome for State Farm. They were blocked by a genius named Brian Martin and man of honor named Gene Taylor who said NO you will not loot the treasury and screw the policy holders of South Mississippi. Our misery was used as the fire under Congress’s butts to pass this one-sided legislative plan of State Farm. They may still get away with it but this case of the RIgbys would stop it. By dumping the claims on NFIP they not only made more money, they also killed the NFIP program’s chance of assuming the wind risk.

    Oh the program is costing too much money and doesn’t work. Well it worked for decades and was not in debt till Katrina. Why did it go into debt into Katrina? Claims dumping by big I designed to increase profits and prevent congress from putting wind and water into one policy.

    A LOT is on the line with the Rigsbys’ case. The Federal Courts have a chance to peek into how big business is looting the US Treasury and put an end to it. Congress has proven itself to be inept at doing this so I hope our Courts can. Part of the checks and balances and part of why Federal Judges are appointed for life and why magistrates should not hear cases concerning the federal government.

  4. Let me expand part of the above comment. State Farm uses every advantage gained in contract terms or regulation to its advantage. By way of example, the concurrent clause is more than a money making tool for State Farm—it is a very powerful political tool for State Farm. Political tool? Yes political tool.

    Here is how it works. Who gets to decide what is an excluded event by the concurrent clause? The one who adjusts the claim does or a Judge if it gets to court. Well, by the number the vast majority do not goto court and none get to court until after the claim adjusted. If a political figure be it the insurance commissioner, AG, Congressman etc does something State Farm does not like after a disaster than guess how strict the ACC language gets interpreted? Very strict. Looser if it the politics flow State Farms way.

    Now consider if we allow State Farm to further divide wind into two parts. The part State Farm pays and the part CONGRESS pays. Mmm. That means if State Farm asks a state regulator for a rate raise it will be asking for a raise in rates for itself AND for Congress.
    Deny my rate request and quess who State Farm will run to and complain they are not able to PROTECT the tax payers from those evil coastal residents who are trying to shift the cost of their insurance to the tax payers? You guessed it. Congress.

    They will use the split wind policy coverage to get Congress to pass Federal Regulation because the state regulators will not allow State Farm to protect Congress from a lack of funding for the fed’s federal backstop. These guys are slick.

    Now the federal regulation they seek is not regulation like they get at the state level. What they want from the fed’s is more of an advocate federal regulator(advocate for the industry and their partner the feds). No rate regulation because that will result in those pesty coastal homeowners from pulling their wait and transfering the risk back to congress. The industry will be the protector of the federal tax payer. Oh the money. All into the pockets of the industry. I would prefer no federal help to that system. Oh well food for thought but lets hope this case turns out well. Thanks.

  5. Can you post Senter’s Order from August 10? Order 344. I’d like to see the “criteria”.

    I’m also very interested in starting a discussion on the Maurstad letter. There are some cases that involved legal issues subsequent to waiving Proof of Loss, and it looks like State Farm’s best defense will be the governments alteration of contractual obligations, and particularly Maurstad’s comment that “FEMA will not seek reimbursement from the company when a subsequent review identifies overpayments resulting from the company’s proper use of the FEMA depth data…”

    I would assume that means that a home totally destroyed my wind, that is in the “in” area…..i.e. flooded, could apply for maximum flood coverage and the government would not request subsequent reimbursement after the actual damage cause was documented.

    Is Maurstad’s letter amending the SFIP legal? If so, Senter has to address it….will Maurstad be subpoenaed to testify? How about Shortly and Johnson?

    By the way, I have never seen the “Attachments” to Maurstad’s letter. Do you have these?

    I first saw Maurstad’s letter as part of OIG-08-97 but the Attachment are not included.

  7. The expedited procedures memo may be State Farm’s best defense but it may also expose them to a broader case. As I interpret it, Senter already has eliminated the slabs and other total losses where the water was sufficiently high and there was not enough physical evidence remaining to challenge the application of the Maurstad memo. All that are left in play are the cases where there was enough house left to require a proper adjustment to determine the amount of the flood loss. If SF brings in Shortley and/or Maurstad to justify paying flood limits on houses that had plenty of evidence for a proper adjustment, that would seem to bring into play all the evidence that State Farm contacted NFIP to initiate the expedited procedure, drafted the memo, and built a fraudulent scheme around it to pay and close flood claims without investigation and then use acceptance of flood checks against wind claims. If all of this is allowed in court finally will the DOJ finally notice? Then they could finally put the focus on Maurstad and Shortley and challege the legality of the memo and all the fraud that was shielded by it.

  8. Brian, I don’t think Judge Senter has eliminated anything. He’s trying McIntosh and ask for similar properties. IMO, he’s just eatiing the elephant a bit at a time but again, just my opinion.

    State Farm’s fiduciary responsibilities did not vary according to type of loss as you know. I’ve just walked in – long day – and need to get the memo and attachments up so that we can continue discussion.

  9. Thanks for posting Senter’s denial of the Motions to Dismiss….it is very informative….I’ll spend some time digesting.

    I do need the Maurstad Letter Attachments…..Senter seems to be separating any adjustment that fits within the Maurstad revisions……does that mean McIntosh does not fit within the Maurstad rules? I thought it fit under process #1….but I don’t have the Attachments.

    Anyway, it looks like Senter will only allow cases that are exactly like McIntosh, processed by State Farm…probably a small subset. At least the Rigsbys will get some vindication. Branch will probably end-up being the better case to follow.

    Hello to Brian Martin, great work for Gene Taylor…….I’m in Washington…retired ex-World Bank…went to law school in retirement….now that’s crazy…I hang out at the Library of Congress almost every day….wrote a hundred page paper on the Rigsby case, would love to share it with you….we should have lunch sometime.

    I sent an email to Rossmiller that he should start apologizing for all that sarcastic stuff he posted on the Rigsbys…..he hit a grand slam on the ACC Clause…it was a legal red herring….but demeaning the Rigsbys in “Gone But Not Forgotten” diminished his reputation.

    I’ve put in some calls to DHS-OIG….which is suppose to update the OIG_08-97 report….wind versus flood issues…..it is part of the 2009 Annual Performance Plan, but nothing posted yet…I’m interested to see how they’re going to process the Branch and Rigsby and MID State Farm report…….

    Thanks again for the Senter Order.

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