This little piggy went to market mediation,
This little piggy stayed at home,
This little piggy had roast beef got taken
This little piggy had none.
And this little piggy went “Wee wee wee” all the way home.
Evidence was produced showing State Farm staged the mediations in advance and actively concealed material evidence from homeowners during the “mediation” process.
Bam Bam’s Bonnet was full of bees and following his buzz about the MID mediation led to a hornet’s nest of information stirred up during State Farm’s May 1, 2007 deposition of Kerri Rigsby in McIntosh v State Farm. Attorney Dan Webb, counsel for State Farm, asked the questions:
Q. Do you recall being involved…in putting on mock mediation?
A. We did put on mock mediation, that is correct.
Q. Do you remember you doing anything related to that?
Q. What part did you play?
A. …Oh, okay. Yes. When we started mediation, they — they asked that — I guess because I had done mediation in Florida, they asked that Cori and I role play mediation for the entire mediation team.
Q. Did you do that?
A. And we did that.
Q. Did you play the insured?
A. No. I played the State Farm representative.
Q. The State Farm representative?
A. So it was all scripted out exactly how it was supposed to be done.
Q. Who scripted it?
A. We — they told us exactly what we were supposed to do.
Q. Okay. There’s that “they” again. Who is —
A. State Farm.
Q. Who specifically told you exactly what you were supposed to say?
A. State Farm team managers, people in charge of the mediation program…As far as prepping us for our first mediations, Doug Taber was responsible for that because he originally was the head manager over mediation. And so what he had us do, is he had Cori, she was to be the policyholder, and I was to be the State Farm representative. And then he gave us our documents that we were supposed to follow as far as Haag Engineer… So, anyway, we — we were told what resources we were to use…Q. Okay. Had you done —
A. — was to show everyone.
Q. I’m sorry. Had you done that before with Renfroe in any other capacity on any other storm?
MR. HAWLEY: (representing Keri Rigsby in the Alabama case, Renfroe v Rigsby)
You mean mock mediation?
Yeah, mock mediation.
A. Mock mediation? Not that I recall.
Q. You had had experience in mediations, however, in Florida?
Q. How long did you do mediations in Florida before you came to Katrina?
A. I don’t recall.
Q. How long were you involved in mediations or mediation work with respect to Katrina?
A. I was involved — I believe mediation started when we merged to the Biloxi office. Around that time, it would have been February, I believe, is when we started our mediations. And I was involved in mediation all the way until June.
Later in the deposition, Dick Scruggs, representing McIntosh, asked these questions:
Q. Ms. Rigsby, did you have a State Farm business card?
A. I did.
Q. Did you wear a State Farm uniform?
A. I did.
Q. Were you under direction and control of State Farm…?
A. I was.
SLABBED’s favorite mediator Victoria Pynchon recently wrote of her concern about court annexed mediation:
the justice system which not only sanctions but promotes court-annexed mediation is lending its imprimatur to an alternative that can and too often is abusive, coercive, biased, secretive and unpatrolled…
In the hands of MID, the mediation annexed by the Southern District Federal Court, the process Pynchon said all too often is…biased and secretive resulted in what plaintiff Glenda Shows called mediation fraud in the Shows v State Farm RICO complaint:
Had Ms. Shows known of the Inspection, Spoliation and/or Deceptive-Coercive Offers Phases of Defendants’ Racketeering Scheme, she would not have accepted this amount, and any purported release executed by Plaintiff at the mediation was procured by fraud and is void.
Ms. Shows was not the only State Farm policyholder who experienced “mediation fraud”. Read as Keri Rigsby’s deposition continues with her description of the session held for Dr. McFarland in response to questioning from Dick Scruggs:
Q. Tell me about that episode.
A. Well, we had — prior to mediation, of course, we inspected the McFarland property, gathered our data, had a meeting, the three of us, Taber, Todd Zastrow, who is another State Farm adjuster. We discussed what the circumstances were and felt like — they felt like nothing would be offered, which, fine. You know, I said, okay. We went to mediation. And, of course, I continued to play my role as State Farm and how they wanted me to play it.
But when Dr. McFarland comes in, he comes in with mounds of information, documentation of things that had happened to and around his property. He had data — just page after page of data. Of course, all we were relying on were the Haag Engineering report and another report called Weather Data. So he comes in. He presents his case, which is — mediation is a forum for each side to present their case. You go with an open mind. You tell the policyholder, we’re going to have an open mind, we’re going to listen to your case again, this is your opportunity.
After a brief discussion between Webb and Scruggs, Rigsby continues:
So. We were at mediation. Dr. McFarland presents his case. We listen.
Q. Well, let me stop you, if I might. Who came with Dr. McFarland?
A. His wife and his daughter, both named Rosemary.
Q. His wife and his daughter are both named Rosemary?
A. Uh-huh, correct.
Q. How old a gentleman is Dr. McFarland?
A. I don’t know his exact age, but I would say he is in his 80s.
Q. And his wife?
Q. Do you know what happened to her?
A. I do. I do know that she passed after our — since mediation. That was the last time I saw her, uh-huh, yes.
Q. She passed away?
A. In her FEMA trailer, yes.
Q. On the slab that you inspected with Mr. Zastrow?
A. On the slab I inspected with Mr.Zastrow.
Q. All right. Now, Mr. Taber was present at that mediation?
A. He was.
Q. And who else besides you were present at the McFarland mediation?
A. Todd Zastrow and then the mediator.
Q. And the mediator was a AAA mediator that the insurance commissioner hadencouraged people to go before; is that correct?
Q. All right. And you had role played this out before the mediation?
Q. And it was scripted. I think that was your term?
Q. Did — and you said Mr. Taber was a lawyer?
Q. Was that disclosed to the McIntoshes?
Q. I mean, the McFarlands?
Q. Or the mediator?
Q. And the decision was made before you went to the mediation that regardless of what evidence was presented at the McFarland mediation, and perhaps others, but that one, that nothing would be offered?
A. …That’s correct…
Q. What was Dr. and Mrs. McFarland’s and their daughter’s reaction?
A. Well, they came there with high hopes. I mean, he came in. He was charged, motivated.
Please excuse me. I have Please excuse me. I have to object to this because now the witness is testifying about what’s in somebody else’s mind. She can’t possibly do that. The question is argumentative as well.
Q. Go ahead and answer it, please.
A. I observed him to be optimistic. I think we had given — I know I had spoken with him, given him hope that he was going to be able to come to this meeting, present his evidence and possibly go home with some type of settlement. He had no idea that when he was walking in that room, his fate had been sealed. He had no chance. He drove an hour and a half, an elderly man with his wife, who was ill, to Hattiesburg thinking that they were going to come to some resolution with State Farm. (emphasis added)
Same objection. Move to strike.
And we knew driving to Hattiesburg that he was not.
Same objection. Move to strike.
Viewed in this context, how is it that Shelia Birnbaum, representing State Farm, could write the Attorney General in June 2007 and state,
…State Farm has acted in utmost good faith. Although it had fulfilled its obligations under Section III by submitting the Woullard settlement to Judge Senter, State Farm went beyond those obligations after the motion for class certification and settlement approval in Woullard was withdrawn by the Scruggs Katrina Group.
State Farm proceeded to establish a mechanism under the auspices of the Mississippi Insurance Department (“MID”) for the fair resolution of its policyholders’ claims to deliver funds quickly for rebuilding in the three coastal counties.
The terms of this resolution process mirrored the compensation to policyholders specified in State Farm’s Settlement Agreement with the Attorney General. The process was endorsed by Governor Haley Barbour as well.
The procedure agreed to with the MID not only is consistent with Section III
of State Farm’s Agreement with the Attorney General, but it also addresses an issue raised by Judge Senter in the Woullard case. One of Judge Senter’s expressed concerns in Woullard was that class members would be required to agree to binding arbitration, at the outset of the process, to participate in the class action settlement process.
This concern is obviated in the MID reevaluation process inasmuch as participation is completely voluntary. Consequently, there is no need for binding arbitration. Each policyholder who has a slab can agree to take the offer (on the same terms as included in the Attorney General’s negotiations with State Farm), or they may refuse, which means they retain all of their legal remedies. For policyholders desiring arbitration, the MID offers non-binding arbitration.
…State Farm does not receive any release until a policyholder accepts its offer. No one is bound to take the offer and, if they do not, policyholders retain all their legal rights. And, in addition to the arbitration program noted above, there is also a mediation process available to policyholders.
There are, therefore, at least three options to policyholders who want to resolve their claims without the expense of hiring a lawyer to pursue litigation or the delays and uncertainty inherent in litigation: the reevaluation program, non-binding arbitration and mediation.
Policyholders can elect to participate in any of these alternatives without giving up the right to pursue litigation if no settlement results from them.
If Ms. Birnbaum’s letter is, in turn, viewed in the context of the post Sop wrote over a year later, a clearer picture emerges of what can hardly be called “utmost good faith”:
I have yet to meet one person who went through the mediation process who did not describe it with words like ”glorified begging”, ”humiliating” or ”complete waste of time”.
(Robert) Hunter’s assertion is perfectly illustrated by the story of Pam Collins and Joy Panks, co-owners of the Twin Lights gift shop in Old Town Bay St. Louis.
“Our insurance company owed us $172,000,” Panks says. The last time she and Collins drove to Hattiesburg for mediation, a representative from their insurance company met them with a check for $55,000. The check was physically placed on the negotiating table, and the two women were given three chances to accept it. “The fourth time, they said they were going to pick it up,” Panks says.
“We were begging,” Collins confesses, thinking back over all the company’s previous offers. The bargaining started at $30,000, then went up to $40,000. “They said $55,000 was the last offer.”
Collins and Panks’ shop was wrecked by Katrina and wiped clean by looters. Their Cedar Avenue home in Pass Christian was completely destroyed — gone without a trace. They spent five months living in a borrowed camper parked in a friend’s yard in Louisiana. With little income and having to spend $30 a day in gas just to get into town to get in line for a FEMA trailer, they took the check. And they took out loans.
“You never think about starting over at my age and owing a million dollars,” Panks says, noting that she’ll be 93 when her Small Business Administration loan is finally paid off. “I guess they can come to Shady Farms to collect,” she jokes.
Humor, Panks says, is the only way to cope with being 58, deep in debt, and having to cash your IRA in order to pay $25,000 for a year’s worth of flood, property, casualty, and wind insurance that may or may not pay off when you need it.
and that little piggy went wee wee wee all the way home with the policyholder’s $117,000.