Day: October 20, 2009

Federal District Court Judge offers tutorial Part Deux: Judge Sarah Vance Educates Insurers about Federal Court Jurisdiction in False Claims Act Cases – A Branch Qui Tam Update

The long and short of Judge Vance’s latest order in the Branch Qui Tam case is LETS GET IT ON BECAUSE THIS BABY IS HEADED TO TRIAL. In a 69 page order and reasons Judge Vance lays out a well reasoned legal opinion with only one hiccup for the plaintiffs which we find on page 54:

Pilot Catastrophe Services, Crawford & Company, and NCA Group must be dismissed without prejudice

But even there the news isn’t so bad for the good guys as Judge Vance continues:

the Court grants Branch the opportunity to amend its complaint to allege an adequate factual basis for its allegations.

Rebecca Mowbray at the Times Picayune picks up the coverage:

The whistleblower suit alleging that insurance companies overbilled the National Flood Insurance Program for flood damage so they could get away with paying policyholders less money for wind damage from Hurricane Katrina is about to begin subpoenaing claim files to get to the heart of the case.

Thanks to a 69-page ruling by U.S. District Court Judge Sarah Vance Monday that severed several adjusting firms from the proceedings, the procedural phase of the case is over after two years of motions and appeals.

“We’re now in a position where we can start discovery,” said Allan Kanner, attorney for the Branch Consultants, a group of former insurance adjusters who discovered unusual patterns of how insurers allocated the bills for hurricane damage, and filed suit. “While it doesn’t eclipse the Saints’ victory, it’s one of the best things that’s happened to us in a long time.” Continue reading “Federal District Court Judge offers tutorial Part Deux: Judge Sarah Vance Educates Insurers about Federal Court Jurisdiction in False Claims Act Cases – A Branch Qui Tam Update”

Judge Walker sorta sanctions State Farm – issues parking ticket in Bossier v State

At least Magistrate Judge Walker acknowledged State Farm failed to comply with the Court’s September 3rd Order with the Order for Sanctions he issued today in Bossier v State Farm.

Before the Court is  Plaintiff’s motion for sanctions for Defendant’s failure to comply with court order of September 3, 2009, which was an agreed order prepared by counsel for the parties and submitted to the Court following a telephonic hearing on discovery matters held that same date. The order required production, “within 14 days from September 3, 2009,” of claims files from a specified area depicted on a map, also prepared and submitted by counsel as an exhibit to the agreed order entered by the Court. Plaintiff complains Defendant neither produced the documents nor communicated with his counsel regarding the files ordered produced by September 17, 2009.

Restating this text in terms that reflect reality, it should have read, “The order suggested production ‘within 14 days from September 3, 2009’ but gave Defendant State Farm leave to get it done whenever.”

Defendant does not deny it was late in producing claim files as required by the agreed order, but points out that it timely complied with that part of the order requiring production of unredacted copies of previously produced files. Continue reading “Judge Walker sorta sanctions State Farm – issues parking ticket in Bossier v State”

Companies that live in a glass house should not throw key performance indicators at glass shops.

First, the “glass house” – Insurance Agents and Brokers Fined for Accepting Kickbacks: Accused of Accepting Gifts to Steer Customers to Specific Auto Glass Shops:

Forty-three insurance agents and brokers have been fined a total of $42,650 for accepting kickbacks, or failing to supervise staff who accepted kickbacks, to steer customers to certain auto glass repair shops, New York Insurance Superintendent James Wrynn announced Friday.

The agents and brokers work at more than two dozen different insurance agencies in Western and Central New York. They are accused of accepting gift cards in return for recommending two specific glass shops to auto insurance customers who had filed claims to have their vehicles repaired.

State law prohibits insurance agents and brokers from accepting payments to steer their customers to specific auto repair shops…

…and, the moral of that story is…in Mississippi it would be a “federal crime”…just ask former Judge Bobby DeLaughter.

Lester said the investigation was begun when Bison Glass, which operates throughout Western New York, contacted the Insurance Department and said it was discontinuing the practice because it could no longer afford to make the payments. A second glass repairer, Pat’s Glass Inc., which had operated in Wyoming County, provided additional information after it went out of business.

The fines – ranging in amounts from $250 to $5,000 — followed an investigation by the New York State Insurance Department…

There are at least two ways to resolve the problem.  One comes at no cost.  Insurance companies could stop taking kick backs.  Duh! Likely, the cost of repairing glass would go down without the cost of kickbacks added.

The other solution would be to come up with some sort of program to cover up the lack of integrity in the industry.  Naturally, the good hand in a boxing glove would be the first out with such a program.

Allstate Insurance announced last week that it will begin recording and tracking a Continue reading “Companies that live in a glass house should not throw key performance indicators at glass shops.”

Judge Walker allows Burger to amend as nationwide Class denied contractor overhead & profit- Burger v USAA

Shall we say, with some apparent reluctance, Judge Walker issued an Order granting plaintiff’s Motion to Amend?

Before the Court is Plaintiffs’ July 13, 2009 motion to amend their complaint to add proposed class action allegations against USAA Casualty Insurance Company (USAA) for failing to properly pay its insureds general contractor’s overhead and profit…The Court having considered the motion pleadings and argument of the parties finds that in light of the liberal standard applicable to amended pleadings, the fact that the motion to amend was timely filed under the case management order, and discovery is ongoing, the Court finds insufficient basis for denying the motion. It is therefore, ORDERED that Plaintiffs’ motion to amend the complaint is granted, this the 19th day of  October, 2009.

Contractor overhead and profit is such an expected construction cost, it simply never occurred to me that payment could be a disputed issue.  Consequently, I found the Affidavit of Stephen L. Strzelec incredibly interesting.  Strzelec has been working as a claims practices expert since November 2002 after approximately eighteen years in the insurance industry working for State Farm:

It is a well known fact within the insurance industry as well as the adjusting community that if repairs to a dwelling require the services of three or more different “trades” (such as roofers, drywall, electricians, painters, and carpenters), then the labor involved in the hiring and coordinating of the work of the different trades during the repair process must be completed by someone. Continue reading “Judge Walker allows Burger to amend as nationwide Class denied contractor overhead & profit- Burger v USAA”