The Scarlet K

…while the stated intent of a “scarlet letter” would be to protect the public, in actual use it has been used as a method to increase the severity of a punishment.

Who wears the Scarlet K of Katrina? According to a Daily Journal story now making the rounds – Two years after indictments, state’s legal community tries to fix Scruggs case damage –  it is the debarred and the Bar:

a stain on the profession…a scar on the Mississippi Bar…a devastating blow

A far more devastating blow, however, is the Bar’s betrayal of the spirit, if not the letter, of the Rules of Professional Conduct that provide a framework for the ethical practice of law – a betrayal that wrongly hung a scarlet K on some and wrongly ignored the conduct of others. Continue reading “The Scarlet K”

Breaking: One by one the North Mississippi “railroad” house of card comes tumbling down

Not defending the attempted fee stripping of John Jones but Mr Jones won’t be taking anything extra from the innocent.

We find that the trial court had the discretionary authority to impose sanctions against SKG based upon the acts of a single partner that occurred in the ordinary course of business of SKG. However, we conclude that the trial court erred by finding that Richard Scruggs’s misconduct occurred in the ordinary course of SKG business.

The Sun Herald wasted no time putting up the news flash from the A/P. Glad to see the Mississippi Supreme Court is more energetic than certain lazy circuit court judges that let certain blogs write their legal rulings for them. Continue reading “Breaking: One by one the North Mississippi “railroad” house of card comes tumbling down”

The feeling is Mutual – so is the fact

…these competing interests–the right to full and free access to the courts and the right to be free of groundless and vexatious litigation–are important considerations in the evenhanded process our judicial system provides for the resolution of legitimate disputes …it is my sincere hope that the type of normal, professional, and focused advocacy necessary to resolve the individual merits of the cases still outstanding will presently come to the fore.

Judge L.T. Senter, Abney v State Farm June 4, 2008

A few weeks later (June 20, 2008), Judge Senter restated his position and SLABBED reported Judge Senter loses patience with the Farm and threatens sanctions:

It is time and past time for the internecine and acrimonious warfare among the attorneys to stop and for the focus to shift to the task of resolving the many remaining cases on their merits. Anything short of this will not be tolerated.

Judge Senter’s commitment to focus on the individual merits of the cases is as reassuring, and I believe as heartfelt, as his wonderfully warm smile.  Consequently, it grieves me greatly to say his north Mississippi roots are showing when he segregates the role of State Farm Mutual from the “merits of the case”.

State Farm Mutual is to State Farm Fire what SKG was to the attorneys working for the member law firms – two parts of the same whole, according to his Order  in McIntosh v State Farm disqualifying all attorneys of the member firms; but, contrary to his opinions and orders when plaintiffs attempt to hold State Farm Mutual accountable for the conduct of one of the claims handling process.

Consider, for example, this text from an Order issued the 17th of March, 2008 in Marion v State Farm denying plaintiffs applications for review of certain orders of the Magistrate Judge: Continue reading “The feeling is Mutual – so is the fact”

Bossier v State Farm – collateral damage or just really bad bad faith claims handling?

During the claims adjustment process, and prior to filing suit on August 20, 2008, Plaintiff provided State Farm with an affidavit of his nearby neighbor, Mr. Ziz, who witnessed the total destruction of the outbuilding and fence prior to the arrival of water.

Joseph Ziz signed his affidavit January 08, 2008, and State Farm continued to deny the Bossier’s claim over the next eight months until the Bossiers finally filed suit just a few days before the SOL on the third anniversary of Hurricane Katrina.

State Farm did not confirm Mr. Ziz’s account of the damage to the Bossier’s property until after the suit was filed. Counsel for the Bossiers attached Mr. Ziz’s affidavit to a Motion for Partial Summary Judgment on Dwelling Extension filed August 7, 2009, the deadline for dispositive motions in the case. (Exhibit 2)

Counsel also attached  the May 11, 2009, recorded statement State Farm took of Mr. Ziz confirming his eye witness account (Exhibit 3); and Mr. Ziz’s sworn deposition testimony given July 9,2009, that confirms without contradiction his eyewitness account of the destruction of the outbuilding and fence prior to the arrival of water (Exhibit 4).

The Bossiers also filed a Motion for Partial Summary Judgment on Accidential Direct Physical Loss with a related Memorandum of Support. Sop sent all of these over just as I was finishing the post on Judge Walker’s in camera review of State Farm’s privilege log.

Thanks to a comment on the Order from eagle eye Shirley Heflin, legal secretary for Chip Merlin for 20 years before she became a full-time student, I caught an important connection that I’d missed earlier.

And my personal favorite part of this is: “The privilege claimed for all the documents reviewed by the Court is “anticipation of litigation.” … Documents prepared in the ordinary course of business are not protected as prepared in anticipation of litigation…”

If it were allowed, it would mean that State Farm was “investigating” a claim with an eye toward litigation for who knows how long? From the inception of the claim?…No, that’s not the way its supposed to be.

I pulled Walker’s Order and checked dates in a footnote to her “favorite part”.

Location of Bossier property relative to McIntosh property
Location of Bossier property relative to the location of the McIntosh property

1The emails are dated between March 6, 2008 and June 19, 2008

Why would Scot Spragins be corresponding with others in “anticipation of litigation” of the Bossier’s claim after State Farm was in receipt of the Ziz affidavit?  What was taking place from March to June that might have caused State Farm to decide to let the Bossier claim go to litigation? Could Bossier be collateral damage?  The docket for McIntosh v State Farm during the period email messages were flying suggests that possibility – and so does the location of the Bossier property relative to McIntosh. Continue reading “Bossier v State Farm – collateral damage or just really bad bad faith claims handling?”

I’ve been through the desert on a horse with no name

October 11, 2005 at 10:41 AM


October 11, 2005 at 10:50 AM Continue reading “I’ve been through the desert on a horse with no name”

What a surprise! Deputy Commissioner of MID joins law firm representing State Farm

The announcement in the Sun Herald  mentioned Deputy Commissioner of Insurance Lee Harrell was leaving the Department to join a law firm.

The Mississippi Insurance Department’s deputy commissioner, Lee Harrell, is leaving after 16 years to work for Baker, Donelson, Bearman, Caldwell and Berkowitz law firm…Harrell spent most of his career under former Insurance Commissioner George Dale, who was defeated for re-election in 2007. Dale, the nation’s longest-serving commissioner, now works in the government relations department of Adams and Reese law firm.

Unlike Dale, Harrell is an attorney. He was unavailable for comment Wednesday. Chaney said Harrell will focus on insurance cases in his new job. Baker, Donelson represents insurance companies and policyholders…Harrell oversaw a market conduct study of State Farm after Dale’s departure. (emphasis added)

Chip Merlin connected the dots.

Anita Lee, of the Sun Herald, recently reported that the deputy insurance commissioner who “oversaw” the Mississippi Insurance Department’s Market Conduct Study of State Farm following Hurricane Katrina has left the Mississippi Department of Insurance. Guess who hired him? The lawyers who represent State Farm in Hurricane Katrina matters. Continue reading “What a surprise! Deputy Commissioner of MID joins law firm representing State Farm”

Cat scratch fever strikes insurance industry – State Farm has bad case

If you been reading the comments to the post about the Louisiana Legislature chances are you won’t be suprised the story Business Insurance News linked as Cat bond activity levels off. (Large H/T to Editilla at the Ladder)

It seems the cats scratched the subprime market a lot deeper that earlier reports suggested and now the cat bond market is suffering from cat scratch fever.

Activity in the markets for industry loss warranties and catastrophe bonds has lessened in 2008, after several years of rapid growth.

Cat-bond activity, in particular has taken a knock, as competition from a softening reinsurance market and waning interest from investors have taken their toll.

After a record year for industry losses in 2005, there were three record years in terms of catastrophe-bond issuance…

Corporate-bond markets now offer more opportunity and so demand for insurance-linked securities has fallen…Cat-bond issuers—namely insurance and reinsurance companies that seek coverage from capital market investors— are in competition with other issuers of bonds, in particular issuers of corporate debt—where credit spreads have widened…This means that the cost of insurance-linked securities has risen as investors now require higher interest payments than in the past to entice them into buying cat bonds…

A number of cat bonds have been devalued…because the investment-banking counterparties were thought to be exposed to subprime exposures. (emphasis added)

State Farm has been in a different kind of cat fight since Hurricane Katrina and this report suggests its running a pretty high fever – otherwise the delusional views cited in the story are just more of the examples of State Farm spinning allegations as fact. Continue reading “Cat scratch fever strikes insurance industry – State Farm has bad case”

Catching Up: Anita Lee Reports on Former SKG Clients

Nowdy has been doing PACER searches for a couple of weeks now and her findings are born out in Anita Lee’s report from the Saturday Sun Herald. Insurance industry bloggers predicting the demise of these cases were a wee bit premature with their prognostications.

…..The Scruggs Katrina Group, reincarnated as the Katrina Litigation Group, was disqualified in April from representing policyholders in 180 lawsuits SKG filed against State Farm. Judge L.T. Senter Jr. ruled then the member law firms knew or should have known Scruggs unethically paid two former insurance adjusters who were potential witnesses in some of the cases.

The Texas law firm Provost Humphrey, recommended by SKG lead attorney Don Barrett, wound up with 62 percent of the 112 cases in which policyholders retained new attorneys, with Coast attorneys taking on the remainder. Continue reading “Catching Up: Anita Lee Reports on Former SKG Clients”

Not a surprise but Scruggs settles with Zuckerman Spaeder

From our friends at Phunk and Wagnalls h/t comes word of a settlement in another Scruggs fee dispute – this one Scruggs v Zuckerman Spaeder.

Why no surprise? We had a big clue in a footnote in the first motion filed by new counsel for the Rigsby qui tam case.

The Rigsbys recently have had some discussions with representatives of Richard Scruggs and/or the Scruggs law firm regarding whether to reduce the indemnity agreement to writing to avoid any confusion regarding its terms. New Counsel intend to assist the Rigsbys in connection with the possibility of reducing the indemnity agreement to writing.

The Scruggs-Rigsby indemnity agreement was at issue in Scruggs v Zuckerman Spaeder. Logic holds that any effort to reduce Scruggs agreement with the Rigsby sisters would have to recognize and resolve the dispute with Zuckerman-Spaeder.

Patsy Brumfield reported on the settlement in todays Daily Journal – with a misleading lede lawsuit against Scruggs Law Firm of Oxford correctly stated later in the story. Continue reading “Not a surprise but Scruggs settles with Zuckerman Spaeder”

Supremely surprising events in Jones v Scruggs (Corrected)

Surprising events can turn old news into new – and that’s certainly the case with the latest news about the fee dispute between Jones, Funderburg, Sessums, Peterson and Lee and the other member firms of the defunct SKG joint venture group.

Surprising event # 1 came from the Mississippi Supreme Court. The MSC granted the Interlocutory Appeal filed by Dick Scruggs as well as the Motion for Reconsideration of the Interlocutory Appeal filed by the other former member firms of SKG – surprising enough to generate Rossmiller’s mildest post yet about a Scruggs related event that alone was a surprising and welcome event.

News editor Patsy Brumfield had the story for the Daily Journal and Alyssa Schnugg followed in the Oxford Eagle story reported on the blog folo.

The Mississippi Supreme Court has granted Richard “Dickie” Scruggs and former Scruggs Katrina Group attorneys a hearing to decide whether a lawsuit involving Hurricane Katrina litigation should go to arbitration.

In April, Circuit Court Judge William Coleman ruled the law firm of Jones, Funderburg, Sessums, Peterson and Lee is entitled to fees and possibly punitive damages arising from their case against the Scruggs Katrina Group for $26.5 million in legal fees from Hurricane Katrina-related litigation. Coleman ruled in favor of the Jones firm because the lawsuit over legal fees led to the attempt by members of the Scruggs Law Firm to bribe Circuit Court Judge Henry Lackey — the original judge presiding over the lawsuit.

MSC’s website provided little information and no clues about what will be considered – clues come instead from a folo reader commenting on the Eagle story. Continue reading “Supremely surprising events in Jones v Scruggs (Corrected)”