hide-and-go-seek in Branch qui tam – and Liberty Mutual, you’re &#IT

96 – 97 – 98 – 99 -100!  Time to open your eyes Magistrate Shushan!

Liberty Mutual is “It” and the game is hide-and-go-seek and see if Branch can find you.  Two new entries of the docket show how the game is played.  The first is an Order issued by Magistrate Shushan:

Considering the foregoing Ex Parte Motion to Seal Pleading (“Motion”) filed by Defendant Liberty Mutual Fire Insurance Company (“Liberty Mutual”), IT IS HEREBY ORDERED that Liberty Mutual’s Motion be and is hereby GRANTED. The Clerk of Court shall designate Record Document Nos. 387-2 and 395 as “Confidential”, and seal said pleadings.

Sop linked the motion granted by this Order in his post Evidence of bad faith is not a trade secret. Hidden in a footnote for those who seek to find was Liberty Mutual’s admission the documents it wanted to seal had been given to Branch in fall 2009 – but, never fear, “Liberty Mutual is in the process of re-bates labeling its production, and will provide all parties with a new set of documents labeled “HIGHTLY CONFIDENTIAL.”

Personally, I’d never trust anyone who thought it was possible to “re-bates” a label.

Now, you’ll see why.  Liberty Mutual didn’t have the decency to even wait for the ink to dry on Shushan’s Order before the Company filed a Motion for Leave to File Sur-Reply Memorandum in Support of Opposition to Branch Consultants Motion to Compel.

However, the Memorandum does not address points in Branch’s Motion to Compel (can you believe it?).  Instead, “Liberty Mutual’s Sur-Reply….”merely seeks to address two misstatements related to Liberty Mutual contained within Branch’s reply brief (R. Doc. No. 395)”.  The second concerns the arrest of Liberty Mutual’s insured:

Branch argues that the arrest of Liberty Mutual’s insured whose property is identified in Paragraph 29(a) of the FAC somehow supports its argument that Liberty Mutual engaged in a fraudulent scheme to shift wind losses to flood. See R. Doc. No. 395, pp. 12-13. According to Branch, “despite the fact of clear, undisputed evidence of wind damage[,]” Liberty Mutual “aggressively avoided making any payments on the homeowner policy . . . and referred the matter to law enforcement, who arrested the insured on suspected insurance fraud[, but] only days later, . . . paid the insured’s flood claim for policy limits” without conducting “further investigation of whether the insured’s flood claim was legitimate or disclosed to FEMA its suspicions of fraudulent behavior by the homeowner.” Id. (emphasis original).

Branch’s argument predictably ignores relevant facts. First, the wind claim and flood claim were adjusted by different outside adjusting companies. Second, while evidence of fraud existed as to the wind claim, the evidence of actual substantial flood damage was overwhelming. Undisputed facts establish that no less than six feet of flood water stood in the insured’s home for over two weeks. This level of toxic flood water easily caused over $103,800 in damage, the insured’s flood limits. In the face of such undisputed flood damage and no reason to believe the insured fraudulently caused its own flood damage, the flood claim was paid on or about December 7, 2005, over three months after the flood loss occurred.

In contrast, the alleged evidence of wind damage to the roof was questionable from the outset, as Branch well knows but wants to ignore. The initial wind adjuster who inspected the property noted tool marks on the insured’s roof when inspecting the property. Review of aerial satellite photographs taken days after the storm show a roof without the damage the insured was claiming. After review of the evidence and statements given by the insured, the Louisiana State Police Insurance Fraud Unit presented the information to Magistrate Judge Harry Cantrell who agreed that probable cause existed to support arrest of the insured for insurance fraud and issued an arrest warrant. At or near the time of his arrest, the insured withdrew a suspicious claim for loss of thousands of dollars of jewelry, advising that the jewelry had been “found.” Because of suspected fraud, the insured’s entire wind claim was denied. Notably, after this denial, the insured did not pursue his wind claim.

Branch predictably ignores this evidence of a fraudulent wind claim, evidence which destroys its claim that Liberty Mutual passed off wind losses to flood losses and compels the conclusion that Branch should not be allowed to embark on the sweeping fishing expedition it seeks.

Hide-and-go-seek.  See what you’ll find:

The docket number referenced “395” is assigned to Branch’s reply brief (see bold type above) – one of the documents sealed when Magistrate Shushan granted Liberty Mutual’s Motion to Seal!  Accordingly, it is subject to the same Order that motivated Liberty Mutual to “re-bates” a label to read “Highly Confidential”.  The pertinent language from the Order states:

“Highly Confidential Information” shall mean all documents and testimony, and all information contained therein, and other information designated as highly confidential, if such documents or testimony contain trade secrets, proprietary business information, competitively sensitive information, or other information the disclosure of which would, in the good faith judgment of the party designating the material as confidential, be detrimental to the conduct of that party’s business or the business of  any of that party’s customers or clients, or contain potentially sensitive personal information of a non-party

Liberty Mutual’s Motion to Seal stated: “…on February 15, 2010, Liberty Mutual designated the entirety of its current document production…as “HIGHLY CONFIDENTIAL”

Consequently, there is reason to question the information about the wind claim and related arrest of the policyholder revealed in Liberty Mutual’s Sur Reply Memorandum.  Since this information has not appeared in previous references to circumstances surrounding this policyholder’s claim, is it contained in documents withheld from production or in documents sealed at the request of Liberty Mutual?

You just can’t trust people who “re-bates” a label!

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