Breaking News – Judge Walker Orders order in Rigsby qui tam!

Judge Walker beat me to the punch with Orders on two of the events I’d just woven into a soon-to-be-published update on the Rigsby qui tam case:  State Farm’s and Non-Party Witness Mark Drain’s Motion to Quash the Deposition Subpoena to Kenneth Mark Drain; and, the Company’s most disgusting motion to date State Farm’s Motion to Compel Patricia Lobrano to Comply with Subpoena Duces Tecum.

A quick bit of background for those who are new to Katrina litigation:  Pat Lobrano is the mother of the whistleblowing Rigsby sisters and Dick Scruggs represented Dr. and Mrs. Lobrano in the litigation of their State Farm homeowner’s claim.

Frankly, State Farm is hoping the cottonwoods that whispered the scripted response for Tammy Hardison to repeat in her deposition will come through again.  However, those who took the time to actually read the transcript of Hardison’s performance clearly  hear Tammy echo “the ole hooty-owl hooty-hoos” and wonder just which “whippoorwill” put her in the position where she can’t let go!

The Relators step up for their mother in a Response in Opposition that begins by stating “State Farm greatly exaggerates the parties’ dispute as to Ms. Lobrano’s subpoena”:

As Ms. Lobrano’s original objections and her recent deposition testimony confirm, there simply are no responsive materials to the vast majority of State Farm’s requests.

State Farm threw 90-pages of s#%$ on the wall to see if any would stick; but, Judge Walker wasn’t fooled and, IMO, did  a masterful job on his Order :

The question presented by this motion is the extent to which Lobrano possesses relevant and discoverable documents and whether Lobrano should be compelled to attend a follow-up deposition…

The Court finds that State Farm is entitled to any documents reflecting communications with the Rigsbys regarding the McIntosh property, Lobrano’s own claim, or the  subject matter of the instant lawsuit. The discovery is limited in scope to the time prior to the McIntosh claim being closed. If there are no responsive documents in her possession or control, then Lobrano is directed to execute an affidavit stating such.

The Reader’s Digest version is Walker appears to be making a real effort to support Judge Senter’s decision for a trial limited to the merits of the Rigsbys’ claim.

More on this Order will follow in the Rigsby update I’ve sloooowly been putting together this past week; but, for now, let’s move on to the Rigsby’s Opposition to State Farm’s attempted “quashing” of the Mark Drain deposition subpoena:

Because Mark Drain was a State Farm team manager who supervised the adjustment of flood claims, he should be knowledgeable of the State Farm procedures at issue in this litigation, including, when Xact Total was authorized, what State Farm adjusters were told about the weather conditions during Hurricane Katrina, and how eye witness accounts were collected and used. That fact alone should entitle the Relators to use one of their allotted depositions to depose Mr. Drain.

But, as the Relators alleged in their complaint, Mark Drain also has unique information about how Lecky King was evaluating engineering reports. Mark Drain issued homeowner policy limit payments based on the conclusion in an engineering report that a home had been destroyed by wind. Am. Compl. [16] at ¶ 88. Lecky King told Drain that the engineer was a “moron” and he should require the engineer to change the conclusion in his report. Id. at ¶ 89. Mark Drain disagreed, and he issued a policy limits payment while King was out of the office.

In denying State Farm’s motion for summary judgment, the Court recognized that there were genuine issues of material fact concerning, in part, State Farm’s decision to order a second engineering report for the McIntosh property. [343] at 7-9. Kerri Rigsby testified that the multiple reports demonstrated that State Farm was “wrongfully attempting to maximize its policyholder’s flood claims,” while Lecky King asserted that the report prepared by Brian Ford was “inaccurate and incomplete” Id. at 5-6. The Relators should be entitled to depose another State Farm employee who had a similar interaction with Lecky King because such testimony is relevant to exploring Lecky King’s bias, motive, and credibility, and to determining whether and when State Farm disputed conclusions in engineering reports.

State Farm makes two arguments in contending that the Relators should not be allowed to depose Mark Drain. First, they assert that Drain “had no involvement, whatsoever, either direct or managerial, with the McIntosh flood claim or homeowner’s claim.” Motion at 1. When State Farm was attempting to prevent the Relators from deposing Lecky King, it similarly argued, “King was not one of the individuals who supervised the McIntosh flood claim, she was not involved in the adjustment or payment of the McIntosh flood claim, and she has no firsthand knowledge of the flood damage to the McIntosh property.” [269] at 3. That argument was not successful, and at this point, it is beyond dispute that Lecky King’s testimony has proven relevant. As the Court has recognized, the Relators are entitled to take discovery into State Farm’s policies and procedures that were in place when the McIntosh claims were adjusted. Order Granting in Part Motion for Protective Order, [413] at 2-3. Mark Drain is knowledgeable of those procedures.

Second, State Farm argues that the Relators should not be allowed to depose Mark Drain because he has been deposed previously on numerous occasions. Each of Mr. Drain’s prior depositions were taken in individual policyholder cases. The issue in those cases was not whether State Farm had conspired to defraud the government, and as such, those depositions should not preclude the Relators from deposing Mark Drain in this case. State Farm recently deposed Patricia Lobrano for the third time, and later this month it will depose Cori and Kerri Rigsby for the fourth times respectively. The Relators have not objected to those depositions, even though they were taken by the same party, unlike Mr. Drain’s prior depositions which were taken by a variety of individual plaintiff’s.

Ultimately, neither of State Farm’s arguments address its burden: whether taking Mr. Drain’s deposition would be unreasonable or oppressive. The Relators are not asking Mr. Drain to produce any documents, and they are willing to depose him near his home. State Farm cites no authority where the simple act of a party’s employee sitting for a deposition, without any extenuating circumstances, has been found to be burdensome.

Judge Walker agrees – believe it or not! – and this Order, like the other, indicates his support of Judge Senter’s decision to try the Rigsbys’ case on the merits of their claim:

The Court finds that the motion to quash should be denied. Drain possesses discoverable information regarding State Farm’s claims handling procedures and use of engineering reports in the Gulfport office for Katrina-related insurance claims. The deposition should be allowed to go forward as scheduled regarding the McIntosh claim and State Farm’s general claims handling procedures. While it remains an open question whether the Rigsbys will be allowed to use Drain’s testimony at trial or in motions practice due to the limitations of Rule 37, that factor alone does not render Drain’s testimony beyond the pale of discovery. Discovery is much broader than admissibility. (emphasis added)

Indeed, “discovery is much broader than admissibility” and Walker’s acknowledgment at this point suggests rough sailing ahead for the “fishing expedition” State Farm is conducting in the guise of discovery.

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