Month: December 2009

Last post of the old year before we ring in the new: Giving thanks, various news, a poem and a Slabbed musical repeat

We’re supposed to be thankful at Thanksgiving and though I was, I didn’t post Thanksgiving wishes. So before we ring out the old year let me start by saying thanks to Nowdy for sticking around for our second year online into our third. She is truly an angel to the people of the Gulf Coast. I’d also like to thank our commenters especially all our regulars and Sup who I’m certain at times just wants to pull his hair out trying to “reason” with us but who remains incredibly kind to us in spite of that. Next up are the lawyers that make sure we keep our I’s dotted and T’s crossed.  The dedication of the trial bar to seeing justice done for ordinary people is truly inspiring. I’d also like to express our gratitude to Congressman Gene Taylor and his staff, especially Brian, Ana Maria and Stephen who are our tireless advocates for the coast, both here and in DC. Without Gene holding the insurance industry’s feet to the fire, what happened here after Katrina would certainly have been swept under the carpet.

I’d also like to think the journalists that read us along with the folks at WLOX.  I don’t cut poor ol’ Dave Vincent much slack but whenever I’ve been in the mood to kick a member of the media in the kiester Dave has always been most accommodating offering up his hiney with a big target on it. (Sponsored by the Mississippi Coast State Farm agents no less!)

I thank our many readers that literally hail from across the world for coming back again and again reading our posts, even Amy and Robert Bullstroke.

I’d also like to thank Editilla over at the Ladder who always gives us too much credit. Brother, folks like you are the reason we do this. Finally I’d like to thank former Louisiana Insurance Commission Jim Brown for his support and encouragement in this endeavor called Slabbed.  Jim gives us his column to publish weekly and does many things behind the scenes such making sure we had an evalutaion copy of the now sold out Edwin Edwards Biography.  Jim is strictly first class.  Now for some news stories I’ve accumulated over the past few days for your enjoyment. Continue reading “Last post of the old year before we ring in the new: Giving thanks, various news, a poem and a Slabbed musical repeat”

Judge Vance denies Defendants Motion for Interlocutory Appeal and Branch qui tam rings in the new with Motion to amend complaint adding Allstate and Pilot Catastrophe Service

Defendants contend that a specific question of law controls this matter: “whether a ‘sleuth’ like Branch, without first-hand involvement in an alleged fraud, can qualify as an ‘original source’ by providing additional examples of a publicly disclosed, alleged fraudulent scheme.”

…The Court need not resolve this question because district courts do not certify “questions” for the court of appeals upon the grant of a § 1292(b) motion.

The eleven-page Order and Reasons s is classic Vance – another pick ’em up, put ’em down tutorial on qui tam law!

Defendants’ primary argument is this: the Supreme Court, in Rockwell International Corp. v. United States, 549 U.S. 457, 470- 71 (2007), abrogated the Fifth Circuit’s “original source”decision in United States ex rel. Laird v. Lockheed Martin Eng’g & Sci. Servs. Co., 336 F.3d 346, 356 (5th Cir. 2003)…Defendants contend that the Court’s Order “diverges from Fried based on pre-Rockwell, out-of-circuit decisions,” R. Doc. 237 at 1, and that there is substantial ground for difference of opinion as to whether a relator who initiates an investigation after an alleged fraud can be considered an original source…

Initially, although defendants make repeated use of the term “pre-Rockwell,” they point to nothing in Rockwell itself that makes it a watershed decision as to the specific issue they identify. Continue reading “Judge Vance denies Defendants Motion for Interlocutory Appeal and Branch qui tam rings in the new with Motion to amend complaint adding Allstate and Pilot Catastrophe Service”

Why do people confess to crimes they didn’t commit? (a repost from SLABBED archives)

Prosecutors wield tremendous power, which is kept in check by a set of unique ethical obligations. In explaining why prosecutors sometimes fail to honor these multiple and arguably divergent obligations, scholars tend to fall into two schools of thought.

The first school focuses upon institutional incentives that promote abuses of power. These scholars implicitly treat the prosecutor as a rational actor who decides whether to comply with a rule based on an assessment of the expected costs and benefits of doing so.

The second school focuses upon bounded human rationality, drawing on the teachings of cognitive science to argue that prosecutors transgress not because of sinister motives, but because they labor under the same cognitive limitations that all humans do.

… Research on the psychological effects of accountability demonstrates that when people are judged primarily for their ability to persuade others of their position, they are susceptible to defensive bolstering at the expense of objectivity.

With these thoughts from A Situationist View of Criminal Prosecutors in mind, we turn to  The Situation of False Confessions: Continue reading “Why do people confess to crimes they didn’t commit? (a repost from SLABBED archives)”

Should the solvency of Kingsway Financial Services matter to Mississippians? Don’t count on Mr Chaney for the answer.

I’ll admit it, until I was tipped I had no idea who Kingsway Financial Services was or whether they were doing business in Mississippi. Then again I am a hard hat CPA so that should be expected. But what about our DOI?

Curious, I began to google and before long I tuned up one of Kingsway’s subsidaries that did business in Mississippi in Southern United Fire Insurance Company based out of Mobile. Giving credit where it is due the folks at Southern United give a link to their AM Best rating on the front page of their web portal. It is not good by the way.

So my next stop was what should have been the first stop but I knew better than that. You see, at the Mississippi Department of Insurance seldom is heard a discouraging word about insurers whether solvent or not. For better or worse our state regulator Mike Chaney is asleep at the switch when it comes to these things.

As an independent agent that is not asleep at the switch told me today, insure with Southern United if you want the cheapest rate, just don’t count on them being around in 6 months to pay your claim. ‘Nuff said.

sop

“Run-off” the cliff and into the ground. The sleazy (and continuing) story of multi-national insurer Kingsway Financial Services

As I spoke with my source on the telephone my jaw literally dropped—-between my day job as a CPA and passion as a hobbyist investor I thought I had seen the sleaziest of the sleazy in characters like Angelo Mozilo, John Mack, Ed Liddy, Hank Greenberg etc but those guys have nothing on the management team of Canadian insurer Kingsway Financial Services Inc. Once again I was also reminded that while stories like the Balloon Boy and White House Party crashers dominate the news, the best stories in my opinion come from the world of finance and are generally under reported by the media. First some background courtesy of Yahoo Finance:

Kingsway Financial Services Inc., through its subsidiaries, provides property and casualty insurance to individuals and businesses in the United States and Canada. It primarily offers non-standard automobile and trucking insurance. The company’s non-standard automobile insurance covers drivers who do not qualify for standard automobile insurance coverage because of their payment history, driving record, place of residence, age, vehicle type, or other factors; and trucking insurance cover liability, accident benefits, physical damage, cargo, and comprehensive general liability under a package program. It also provides standard automobile insurance; commercial automobile insurance; commercial and personal property coverages; motorcycle insurance; residential wind insurance coverage; construction defect claims; and other specialty coverages, such as customs, bail, and surety bonds. In addition, the company purchases reinsurance from third parties.

The Yahoo profile typically derives from the first footnote to the annual financial statements issued by the company. Not included of course is a short financial history which in Kingsway’s case we define as beginning in 2005 when this huge company began to implode racked by bad underwriting and investment decisions. In this case the shareholders tried to get management to right the ship led by activist investor Joseph Stilwell whose group owns over 10% of Kingsway. Mr Stilwell also could answer to the title bagholder as I’ll explain a bit later.

In Kingsway’s case the problems are massive and well documented. Over the past year several of the Board of Directors have resigned as has the Chief Financial Officer and Kingsway’s unresponsive CEO W. Shaun Jackson. Insurer specialized AM Best and the other ratings agencies have been steadily downgrading the company which also appears to be in violation of certain debt covenants. One particular operating company, Lincoln General Insurance Company, which underwrote commercial truck insurance in Pennsylvania was particularly unprofitable to the detriment of the entire organization. Continue reading ““Run-off” the cliff and into the ground. The sleazy (and continuing) story of multi-national insurer Kingsway Financial Services”

Jim Brown on airline security and the latest would be terrorist: Great Balls of Fire!

Wednesday, December 30, 2009
Baton Rouge, Louisiana

SO THIS TERRORIST WALKS INTO A LOUISIANA BAR

I was in the New Orleans airport this week waiting as a family member made her way through airport security with two small babies. Boy, were these guys with the Transportation Security Agency on the job and up to the task of stopping any terrorist threats. They all but strip searched her, opening every baby bottle and jars of baby food. Nothing gets by these guys. Well, except for Arabs loaded down with explosives.

No profiling allowed even though terrorist after terrorist fits a similar description. We can’t do that for it would be politically incorrect. Why is it that we profile clothes, but not the person? One guy years ago tries to set off an explosive with his shoe, so every traveler from that time on has to take off the shoes.

On Christmas day, A Nigerian national boarded a flight from Amsterdam to Detroit with his underpants packed with explosives. His frighty whities came with a special pouch to hold the explosives, no doubt sewn by al Qaeda’s finest seamstresses. You can just hear Louisiana’s own Jerry Lee Lewis hollerin’ “Great Balls of Fire.” All to no avail as his crotch bomb failed to ignite, and alert passengers wrestled the terrorist thug to the ground. Continue reading “Jim Brown on airline security and the latest would be terrorist: Great Balls of Fire!”

A mind is like a parachute. If it doesn’t open, you’re f#@%*d!

If you’ve wondered why there are differing perspectives about the factual basis of litigation, find the cord to your parachute and open your mind to Harvard Law’s Project on Law and Mind Sciences and situationism.

Situationism is premised on the social scientific insight that the naïve psychology—that is, the highly simplified, affirming, and widely held model for understanding human thinking and behavior—on which our laws and institutions are based is largely wrong. Situationists (including critical realists, behavioral realists, and related neo-realists) seek first to establish a view of the human animal that is as realistic as possible before turning to legal theory or policy. To do so, situationists rely on the insights of scientific disciplines devoted to understanding how humans make sense of their world—including social psychology, social cognition, cognitive neuroscience, and related disciplines…

SLABBED reflects a situationist perspective and even touches on the subject in posts such as:

Recommended holiday (half-time) reading includes the blog post, On the Ethical Obligations of Lawyers: Are We Snakes? Are We Supposed to Be?, and the following readings from Continue reading “A mind is like a parachute. If it doesn’t open, you’re f#@%*d!”

Scrooges and Stooges – State Farm attorneys pack the sleigh!

More rapid than eagles these coursers they came

Scrooges and Stooges that went straight to work

Filling stockings with motions and giving justice a jerk!

Katrina insurance litigation is beginning to not look at lot like Christmas – even when State Farm slips in a check.  Take Kuehn v State Farm, for example.  Anita Lee reported State Farm pays up, but argues award was in error in Monday’s Sun Herald:

State Farm Fire & Casualty Co. recently paid a couple $179,100.31 for Katrina damage, but their attorney said the check came too late to save Henry and June Kuehn’s Cove Place home.

Attorney Earl Denham said the two-story house further deteriorated as the Kuehns awaited settlement of their insurance claim. The city of Ocean Springs wants the property cleaned up.

U.S. District Judge L.T. Senter Jr. ordered the Katrina payment in August, but State Farm has asked him to reconsider the ruling.

“This amount is tendered without recourse, but with the understanding that this is not an admission of an amount owed,” said a letter sent with the check by State Farm attorney Scot Spragins of Oxford. “Given the circumstances, State Farm has decided to make this tender to eliminate the threatened destruction of the Kuehns’ home.

“State Farm intends to continue to litigate the issue. In the event that we are successful and it is determined that these sums are not owed, then State Farm will not seek reimbursement.”

Denham replied the next day: Continue reading “Scrooges and Stooges – State Farm attorneys pack the sleigh!”

Is Chaney the Grinch who stole insurance industry’s Christmas?

He puzzled and puzzled till his puzzler was sore. Then the Grinch thought of something he hadn’t before! Maybe everyday doesn’t have to be Christmas for insurers who want higher rates for the shore.  Maybe Christmas…perhaps…means zones are no more!

They’re finding out now that no Christmas is coming! They’re just waking up, I know just what they’ll do. Their mouths will hang open a minute or two, then the Whos down in Whoville will all cry, “Boo Hoo.”

“We won’t take zone filings for the time being. I think the larger carriers have abused that privilege. We’re trying to bring some reasonableness to how they handle their rates.” Continue reading “Is Chaney the Grinch who stole insurance industry’s Christmas?”