Judge Senter sharpens his carving knife on Orders in Rigsby qui tam

Actually, Judge Senter pulled his knife out at the end of last week and while I was trying to find time to get those two Orders  posted, he was sharpening his knife on two more – but what  he has in mind is no  turkey, it’s the December 1st  Status  Conference on his schedule:

I have decided to continue the trial of this case from its present setting on December 1, 2010, and to set a status conference on that date to hear from all parties on the merits of the motions that remain undecided at that time.

Two motions pending “at that time” and mentioned in his  Order were the Government’s motion to vacate Judge  Senter’s  Order dismissing defendant Forensic and the Rigsbys’ motion to reconsider the scope of the proceedings.

These motions are fully briefed, and I do not anticipate requiring any additional briefings at this time. After this conference, I will reschedule the trial to accommodate my rulings on the pending motions.

Judge Senter should have known State Farm would consider that an  invitation.  In that context, today Judge Senter sent “regrets” to Butler Snow – and denied State Farm’s motion to declassify portions  of 30(b)(6) deposition of TRG (The Rendon Groups)in support of “the good neighbor’s “motion to dismiss the Rigsby’s case for repeated violations of the seal.  In his Order, Senter stated:

After reading the materials submitted in support of this motion, including the Rule30(b)(6) Deposition of the Rendon Group [Document 756, Exhibit 1] and theSupplemental Responses submitted by TRG [Document 756, Exhibit 2], it appears to me that the material in question has only marginal relevance, if any, to the merits of the State Farm motion [739] to dismiss. Outside of a few references in the TRG deposition(Document 756, Exhibit 1, between pages 133 and 138) to certain disclosures alleged to have been improper, I can see no other materials that would be relevant to StateFarm’s motion [739] to dismiss.

Accordingly, I will deny the motion to declassify these documents, but I will permit State Farm to submit any or all of these documents under seal in support of its motion [739] to dismiss. An appropriate order will be entered.

In August,  Judge  Senter denied State Farm’s  motions to exclude the expert witness testimony of Dr. Ralph Sinno and, in early September, he did likewise denied State Farm’s motion to exclude the testimony of Louis Fey.

Today, he turned the table in an Order granting  the State Farm motion to exclude the testimony of engineer John Fowler who reported on wind damage to the property of McIntosh  neighbors the  Mucha’s:

The gist of Fowler’s testimony boils down to his opinion that the storm winds were strong enough to do extensive damage to the Mucha property before the property experienced storm surge flooding. Relators contend that this establishes a fact in dispute, i.e. that the storm winds were strong enough to do substantial damage to the McIntosh property before the storm surge flooding occurred. I disagree.

If the two properties were substantially similar in construction details, wind exposure, and other particulars, I would agree with the relators that Fowler’s testimony would be relevant. The two properties are in close enough proximity to each other to reasonably infer that they were exposed to similar, though not identical, wind forces.

But the Fowler report does not disclose whether the McIntosh property is similar in construction to the Mucha property. While the report does discuss the construction of the Mucha property, it makes no comparison between the two properties in terms of strength of construction or in any other particulars. For this reason, I do not believe Fowler’s opinion on the damage to the Mucha property sheds any substantial light on the extent of the wind damage sustained by the McIntosh property…

Obviously, Judge Senter started sharpening his knife with State Farm’s motion to exclude the testimony of Dave Favre. Notice how deftly he sliced out the part he denied in his Order while granting the rest:

State Farm objects to Favre’s offering his opinion that–in the context of adjusting a loss that includes both flood damage and wind damage–a conflict exists between the
interest of the insurer, who must pay for damage attributable to wind, and the interest of the United States, who must pay for damage attributable to flooding. State Farm also objects to Favre’s anticipated testimony concerning the duties that arise in these circumstances.

In connection with the flood insurance program, there exists an acknowledged potential for a conflict of interest…The key issue is not whether State Farm was operating in circumstances that could give rise to a conflict of interests, that is a given; the key issue is whether, in these circumstances, State Farm discharged its responsibility to adjust flood claims fairly and honestly, i.e. to make a good faith effort to pay full compensation for existing flood damage and no more. The undisputed fact that State Farm was acting in circumstances that give rise to a potential conflict of interest sheds no substantial light on whether State Farm acted properly, and any minimal light that fact may shed on this issue if far outweighed by the risk that the jury will infer that State Farm acted improperly because it was operating in a situation that gives rise to a potential conflict of interest. For this reason, I will not permit Favre to testify concerning this conflict of interest.

Significantly and over State Farm’s objection, Senter permitted Favre to testify to:

The Values Favre Used in Preparing his Xactimate Estimate;

State Farm also argues that because the McIntosh property has now been repaired, any estimate of the repair cost has been rendered irrelevant. While this argument might have considerable weight if the issue were the actual cost of repairs, it is less persuasive in the context of this case, where the issue is whether, based on the information available at the time, i.e. before the repairs were done, State Farm intentionally overpaid the McIntosh flood claim, as the Relators have alleged. Again, State Farm has not offered evidence, by affidavit or otherwise, that the repairs done to the McIntosh property reflect only the restoration of the property to its pre-storm condition, i.e. that the actual costs incurred did not reflect any changes or improvements to the pre-storm condition of the structure.

Favre’s Use of Sinno’s Theory Concerning the Rupture of Water Pipes Inside the McIntosh Property Ralph Sinno, one of the Relators’ experts, theorized that the wind forces on the McIntosh dwelling were sufficient to compromise the structural integrity of the building before the arrival of the storm surge. Sinno expressed his opinion that these wind
forces may have forced enough movement in the structure to cause interior water pipes I have previously ruled that Sinno is qualified to give testimony as an expert
witness in this case. It follows that Favre may rely on Sinno’s expert opinions in reaching his own conclusions concerning the extent of flood damage to the McIntosh
property.

The Water Line Inside the McIntosh Property
Favre acknowledges that determining the water line inside a given property is one of the essential steps in evaluating flood damage. Damage below the water line is ordinarily considered flood damage, and damage above the water line is ordinarily considered wind damage…

According to the report of Robert Dean (Dean), one of State Farm’s experts, the height of the storm surge flooding in the area of the McIntosh property, determined by
FEMA, was 18.6 feet above sea level. Dean estimates the first floor of the McIntosh home is 16.5 feet above sea level. If these two figures are correct, this is substantial
evidence to support the conclusion that the flood water inside the first floor of the McIntosh property reached a depth of 2.1 feet. Of course, this is not a precise measure
of the water level, given the storm conditions that kept the water in motion, but it is a valid estimate or approximation, and one Favre is entitled to rely upon in forming his
opinions.

Judge Senter must have sharpened his knife to a fine point before he denied State Farm’s motion to exclude the testimony and documents of Rigsby expert Brian Ford, carving out a small part that he granted in his Order

State Farm contends that the Ford report is inadmissible hearsay and that it contains a statement that is double hearsay . Relators argue that the report is admissible as a business record.

Ford identified his report during his deposition testimony, and he stood by the opinions he expressed in the report. According to Ford, at the time he prepared his report, he was under instructions to determine only the “predominant” cause of the damage to the property. This was a change from his earlier instructions. Ford testified:

“ . . . when I first started doing the assessments, I was asked to do – – to state what damage was done by wind and what damage was done by rising water. Shortly after
those reports started going in, I was asked to put a percentage on each, to change our process to put a percent of damage by water and percent of damage by wind. Shortly
after that, I was asked to only state a predominant cause of damage.” (Ford deposition,Document 793, Exhibit 1, page 36, lines 4-15).

If the Relators intend to introduce Ford’s report as part of his deposition testimony, I do not believe State Farm’s hearsay objection would be valid. Ford’s having identified his report and having vouched for its accuracy and truthfulness while under oath takes it out of the hearsay category. Standing alone, I agree with the Relators that the report qualifies as a business record, even though State Farm correctly points out that it contains a statement that is itself hearsay. The report reflects, under the sub-heading Site Observations:

“According to Mr. McIntosh, a neighbor–Mr. Mike Church–reported that houses were blown apart and debris was thrown into the McIntosh house at approximately 8 AM and
the floodwater [sic] began rising at 11 AM.” Mr. Church denies having made this statement to Mr. McIntosh. (Affidavit of Mike Church, Document 778, Exhibit 5). In these circumstances, I will allow a copy of the Ford report to be introduced, but only with the hearsay statement concerning Mr. Church redacted.

Judge Senter also granted the unopposed motion to dismiss defendant Lecky King. I’m uncertain if other motions are pending but, if time permits, I’ll look over the docket and report what I find before the December 1st Status Conference.

3 thoughts on “Judge Senter sharpens his carving knife on Orders in Rigsby qui tam”

  1. Senter is a good and thoughtful judge, but he should let in the stuff he ruled to keep out. So what if the houses were constructed differently; let the engineer be crossed on that issue and see who the jury believes. And I don’t really understand why Favre cannot comment on the obvious conflict of interest. Let it all come in. This is a “search for the truth,” not a game of hide and seek.

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