Kudos and props to Nowdy as all that time and hard work she put in reorganizing our legal pages has been recognized in the media. Jeff Amy has the story for the Mobile Press Register:
Pilot Catastrophe Services Inc. has been dismissed from a federal lawsuit in New Orleans that claims insurers overbilled the National Flood Insurance Program for flood damage so they could pay policyholders less for wind damage from 2005’s Hurricane Katrina.
The Monday ruling allowed the whistleblower suit by Branch Consultants, a group of former insurance adjusters, to go forward after two years of wrangling. But it severed Pilot and two other adjusting firms — NCA Group and Crawford & Co. — from the case.
State Farm Fire and Casualty Co. and Allstate Corp. were removed earlier. Left as defendants are Travelers unit Standard Fire Insurance Co., Liberty Mutual Fire Insurance Co., American National Property & Casualty Co., Fidelity National Property and Casualty Insurance Co., American Reliable Insurance Co., Colonial Claims Corp. and Simsol Insurance Services Inc.
Insurers say there’s no merit to claims that they pumped up flood damage and reduced estimates for wind damage to increase their profits. A similar suit is pending in Mississippi.
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”
When I began blogging to what would become Slabbed my knowledge of complex finance was exceeded only by my ignorance of how the political process really worked. What I found from my perch here in Soggy Bottom is that talking aka cussin’ and discussin’ dominates the process. And besides all the talking that goes on inside the beltway there is a mirror conversation that happens on the outside, in places like Yahoo Allstate finance message board and in Sheila Brinbaum speeches where alternate realities are peddled out of economic self interest.
Beyond the shilling however the Government Accountability Office has been looking at the NFIP and their findings tell the real story, of a program abused by private for profit insurers with no oversight on part of FEMA. For instance in September 2007 the GAO found:
FEMA’s payments to WYO insurance companies for operating costs ranged from more than a third to almost two-thirds of the total premiums paid by policyholders to the NFIP for fiscal years 2004 through 2006……
The approach FEMA uses to determine operating costs for WYO insurance companies, rooted in policies negotiated and established about 25 years ago, cannot ensure that payments are based on reasonable estimates of actual expenses because actual expenses incurred by the companies for their services to the NFIP are not considered. Although it has authority to do so, FEMA does not collect data on actual WYO flood insurance expenses that could provide a basis for insuring that the WYO payments are based on a reasonable estimate of actual expenses.
Fast forward to December 2007 and another GAO report which found FEMA asleep at the switch and a program structures to create “an inherent conflict of interest”:
Insurance coverage gaps and claims uncertainties can arise when coverage for hurricane damage is divided among multiple insurance policies. Coverage for hurricanes generally requires more than one policy because private homeowners policies generally exclude flood damage. But the extent of coverage under each policy depends on the cause of the damages, as determined through the claims adjustment process and the policy terms that cover a particular type of damage. This process is further complicated when the damaged property is subjected to a combination of high winds and flooding and evidence at the damage scene is limited. Other claims concerns can arise on such properties when the same insurer serves as both NFIP’s write-your-own (WYO) insurer and the property-casualty (wind) insurer. In such cases, the same company is responsible for determining damages and losses to itself and to NFIP, creating an inherent conflict of interest.
And the GAO continued looking at the program most recently with the issuance of this report dated last month. The professionals at GAO continue to find a program operated with little oversight and no internal controls: Continue reading “The GAO does some more cussin’ and discussin’ on the National Flood Insurance Program”
But alas those damming transcripts I posted late yesterday and today were ruled relevant by Judge Fallon. Personally I hope, should Congress hold hearings in conjunction with the reauthorization of the NFIP, that Ms Beno be called to DC to further illuminate and expand on what she told the Weatherly’s PI. I don’t know how much but I strongly suspect this case settled out for many times over the Weatherly’s policy limits to keep the certain to be bad jury verdict out of the media. So while we don’t have a verdict on the record we do have the phone transcripts and tapes which should never be confused with an illegal wiretap. Continue reading “Weatherly v State Farm: The Farm tried to quash the Beno recordings”
The people on the post Katrina coast had the same feeling though it was not confined to State Farm as we continue with the transcript of the Weatherly family’s PI’s talk with former State Farm call center employee / insurance adjuster Lorrie Beno:
A. You know, and I ran it on my house here just to see, because I just built a house and I thought that thing is coming in really high, I don’t have enough insurance on my house and it was pricing it a lot more to rebuild it, but they were – I don’t know. They wanted to pay them off on those policies. They said things to us like we got to get money into these people’s hands, it’s going to take a while to get to these wind policies, we’ve got to get some money in their hands, and that’s what they did, they paid them off on the flood, and we all kind of rolled our eyes, because we were going yeah, you want to get money into their hands that belongs to someone else, you know, as long as someone else is paying the bill, it’s good.I don’t know, you know, there were a lot of people at State Farm that were really good, honest, people, but you just always had the feeling that something wasn’t right there. I don’t trust the carriers anyways, I never have.
The public has definitely caught on to the not trusting insurer thang after their outrageous behavior here after the storm. With the first interview concluded and the PI finding Ms Beno quite the honest, open and chatty type, after consultation with the Weatherly’s legal team, a second phone call was in order and it is there we pick back up: Continue reading “A view from the inside of State Farm’s call center Part Deux: “you just always had the feeling that something wasn”
Q. …….Would you be willing to chat with him briefly about this? He just has a much better grip on the issues in this case and I think that it would be more helpful to him to talk directly to you.
A. Wow. I’m kind of torn here. I do this – I’m in this business because I like to see that people get every dime they’re entitled to and that’s what gives me satisfaction in this job. I think the companies screw over people regularly. On the other hand, I have had my neighbor suing me for four years on an easement that’s been in existence since 1920. I have been abused by a whole number of attorneys including the judge who likes to keep his docket padded and that’s why we’re in this situation.
Q. I understand.
A. So right now, I have really had my fill of attorneys and don’t care to help one out. I wouldn’t help one cross a busy street right now.
The litigants on the post katrina coast know exactly where State Farm adjuster Lorrie Beno is coming from with those remarks which were transcribed from the recording of the phone coversations she had with a private investigator hired by the Weatherly family in their fight against State Farm. We seen our fair share of judges (mostly former insurance defense lawyers) who don’t follow the law or abuse elderly policyholders like Magistrate Walker has Mrs Politz in her suit against Nationwide. We’ve seen lawyers with questionable ethics like Scot Spragins and his sidekick Lucky Tucker of Hickman, Goza and Spragins abuse the court system and flaunt court orders earning fees from State Farm. I could go on and on giving many other examples but let’s visit back with Miss Beno as she describes how State Farm adjusted flood claims:
A. I don’t know how it was handled on the wind at all.
A. The only thing I can tell him, which he probably already knows, is find out that adjustor has been an adjustor.
A. Because of the laws that are made that people are screaming to see their adjustor immediately, they hire off the street and give them some little short training course and make them an adjustor and get them a temporary license and send them out. Continue reading “A view from the inside of State Farm’s call center: “I think the companies screw over people regularly.” Lorrie Beno, Welcome to Slabbed”
And then some in my opinion. Many thanks to Steve who organized the meeting space We had 5 policyholder lawyers representing 5 different firms from both sides of the state line come compare notes. I think everyone learned something.
For my part it brought back memories of the sultry sounding women that man the Farm’s call centers. Many of these highly seasoned claims professionals could have lucrative careers in the 900 numbers IMHO.
Meantime we’re working to get our hands on one of them call center depos to find out Continue reading “The first Slabbed Legal Confab was a success”
A dispute of material fact ~ Rigsby qui tam.
Part 1 – The Setup Segment
[youtube=http://www.youtube.com/watch?v=FfoR8EuSQLk] Continue reading “Slabbed Daily Weekend Edition: Wind of Katrina Repost”
However, that doesn’t stop Sam’s man of integrity, Robert Hartwig’s and his spin meisters at the Insurance (mis)Information Institute, from dismissing a recent Consumer Reports survey that found half of the Katrina impacted residents that responded had trouble with their insurer with a full 26% saying they were under paid. The National Underwriter has the story and related III spin (h/t Editilla):
Half of Consumer Reports’ readers who filed insurance claims resulting from Hurricane Katrina in 2005 said they had problems with their insurer, the magazine reported.
In the September issue of the consumer watchdog’s magazine, the organization says 26 percent of its readers also complained that they were paid too little for their claims.
“A disaster tests everyone, and in the eyes of our readers insures often failed that test,” the magazine said. Continue reading “Play it again Sam. No Amount of PR will cover what insurers did to the people here after Katrina.”
FRANK, B. (D-MA): I yield myself three minutes and I yield for question to our colleague from Mississippi, who has been with our support on our committee, a major proponent for protecting the people who he represents in the area of wind and elsewhere. I yield to the gentleman.
Could it be the gentleman from Massachusetts took the letter from Napolitano with a grain of salt? Many thanks to Nationwide attorney Christopher Landau for enlightening the country on exactly how his client Nationwide fleeced the US taxpayers.