Tag: David Maurstad

Of being cursed with too much knowledge plus another Nowdygram: An Ex Rel Rigsby Update

State Farm began their defense in the Rigsby whistleblower lawsuit involving allegations they and other insurers defrauded the National Flood Insurance Program after Hurricane Katrina early this week and I immediately noticed a foul odor that seemed to emanate from the Federal Courthouse in Gulfport when former NFIP Director Dave Maurstad took the stand for State Farm.  To understand Maurstad and the concept of the revolving door, you gotta understand these guys circle from private sector insurance related jobs to government regulatory positions and back each time collecting more career enhancing favors.  With this bunch it is always about the next job so the insurance industry could not have had a better water boy in place when Katrina hit than Dave Maurstad.

But once upon a time ol’ Dave was not so keen to testify about the NFIP handling of Hurricane Katrina claims no siree.  In Bolden v FEMA for instance Dave had to be compelled to show up at the Federal Courthouse to testify about the expedited claims process he and Lecky King came up with after Katrina.  Worth noting is rather than let Maurstad testify FEMA opted to settle Bolden immediately.  The bottom line is most people I listen to think Maurstad is a self serving hack under whose watch the NFIP sank into technical insolvency.

But it got deeper yesterday folks as State Farm retiree Lecky King took the stand with the sound of miniature violins playing in the background as Anita Lee explains in her latest dispatch from the Courthouse (I hope McClatchy sent a gas mask with her and is considering hazardous duty pay):

Career almost destroyed

Lecky King, on the other hand, said State Farm attorneys prepared her for her testimony. She spent her last few years at the company working on policyholder lawsuits filed after Katrina and on the case against her, which at one time was part of a criminal investigation that never resulted in charges.

Seems like it was just yesterday that King was living in an exclusive gated community in the Florida panhandle ducking subpoenas in the policyholder cases. In one of those cases an enterprising lawyer for a Slabber managed to get a birthday clown past the guards to serve some paper on King, whom I am fairly certain was richly rewarded by Ed Rust for her service in fattening his paycheck at the expense of natural disaster victims. Continue reading “Of being cursed with too much knowledge plus another Nowdygram: An Ex Rel Rigsby Update”

Rigsbys file “Motion to Reconsider Scope of Proceedings in Light of Evidence Adduced in Discovery” – ask Court for additional time to conduct Discovery into “the Scheme”

“Relators, through limited discovery, have already obtained sufficient evidence to demonstrate that State Farm engaged in a broad, systemic, intentional scheme to defraud the government. Moreover, discovery has revealed that State Farm’s scheme extends far beyond the McIntosh flood claim…”

While State Farm’s legal team has made every attempt to turn the upcoming trial into a “Scruggs sideshow” despite Judge Senter’s Order to the contrary, Counsel for the Rigsbys’ has, instead, presented the Court with the opportunity to reconsider the Scope of the Proceedings – an option commentor James Barbieri suggested when he posed the question, “if Judge Vance has expanded the scope, doesn’t this force Judge Senter to move beyond McIntosh”.  However, the Rigsbys’ Motion to Reconsider relied on evidence of “the scheme” gleaned from evidence revealed in Discovery, evidence supported with Exhibits attached to the Motion and discussed in the accompanying Memorandum in Support of Motion to Reconsider Scope of Proceedings…

“The NFIP Claims Manual requires that “repair estimates should be prepared room-by-room,on a unit-cost basis, clearly indicating dimensions and unit costs, except when the building has been completely destroyed.” NFIP Director David Maurstad testified that prior to Hurricane Katrina, flood claims had to be adjusted using a line-by-line stick build estimate. Maurstad also testified that following Hurricane Katrina, he tasked the NFIP Director of claims to come up with a method that “I could ultimately approve that could guide the Write Your Own Companies to handle claims in an expedited process specific to this . . . disaster, to Katrina.”

Maurstad testified that FEMA Directive W-5054 embodied the only expedited claims procedures that he authorized.  That directive allowed adjusters to use a square foot value estimator instead of a line-by line estimate in two very narrow circumstances: (1) when a home “had standing water in it for an extended period of time”; or (2) when a home was “washed off its foundation by flood water.”

Discovery revealed that State Farm ignored the NFIP and Memorandum W-5054. Rather than follow the NFIP’s rules, State Farm expressly applied their own rules, Continue reading “Rigsbys file “Motion to Reconsider Scope of Proceedings in Light of Evidence Adduced in Discovery” – ask Court for additional time to conduct Discovery into “the Scheme””

Ahoy WYO Fiduciary, Icy Waters of NFIP Lie Ahead!

Katrina through the eyes of State Farm: a now familiar story that begins in Bloomington, in a boardroom, awaiting an angry sea. August 29, a third of Mississippi is nuked. In comes a headline-starved lawyer, well healed and ready to “save the people.” State Farm repairs to Birmingham, a Roveside rat’s nest. Alas, the 4 year odyssey begins.

In the meander of this cyclonic tragedy, countless homes, lives, reputations and chattel are ravaged like the spoils of war. A senior federal judge, bent on political revenge, soils the bench he occupies. Two “factory” girls of the Cat adjusting world, forthright and honest-to-a-fault, are savaged by a $56 billion racketeering monopoly and its Hessian body broker. Associated hard-driving plaintiff lawyers, indispensible lifelines to thousands of victims, are systematically slandered by thug corporate lawyers, and then, through no fault of their own, thoughtlessly disqualified by a rudderless federal court. Behind the scenes, lifer law clerks – insidious martinets of the inner sanctum – work the ex parte back channels for ways to advance their impish political agendas. A 30 year pimp politician is stripped bare and lampooned, a righteous comeuppance for the thousands of lives he’s ruined. A neophyte lawyer-journalist who wouldn’t know a hurricane loss if it bit his private parts off, shills and cons his way into the affray, and trafficking on scandal, emerges as a self-ordained insurance expert.

Four (4) years of rampant fraud, $13 million a day in falsely settled claims, without so much as a single uptick on the legal side. Think of the money spent, the millions wasted, the dreadnought trial schedules, as if the whole thing were an interminable English parlor game. Motions, replies, briefs, extensions, sanctimonious trials, an endless procession of mindless bureaucracy, saddling already helpless people with cost in the hundreds of thousands, all just to get a contract debt paid. Unable to deliver even basic service, the court outsources, dumping bereft insureds in the laps of purchased mediator-lawyers, eager to stay in good with their fee paying, corporate check writers. Judged for fidelity of service and “get-er-done” efficiency, the legal system is an antideluvian disaster, a deus ex machina, lacking rope and hoist. Continue reading “Ahoy WYO Fiduciary, Icy Waters of NFIP Lie Ahead!”

Federal Flood Coverage, A Love Story

*Bam Bam readers, astute observers they are, will readily detect that certain events in the “Story” are dramatized for effect, including the anonymous dialogues below.

state_farm HQ
State Farm Corporate Headquarters

In August 2005, the month of Katrina, headquarters in Bloomington was bedlam. For all its awesome power, State Farm could do nothing but watch the leviathan hurricane augur the Gulf, trying to decide which sovereignty it would smash to smithereens. Didn’t really matter, State Farm was sure to hemorrhage its record profits, and the thought of it was killing everyone. No one . . . no select senator, congressman, lobbyist, corrupt federal judge or ex-FBI man could do anything this time.

Katrina was aiming for Louisiana-Mississippi. Hourly alerts spewed out to department heads, permeating every building on the so-called Bloomington “campus.” In the days ahead, scores of corn fed, flat-butted minions – “Stepfords” – the townspeople called them, would be summoned from various corporate divisions: legal, claims, Cat services, underwriting, media relations, data management, etc. Even the draconian “Claims Counsel” would be called into session.

Katrina threatened to burn a hole in the company’s record profits. With 800 in-house lawyers, State Farm had nearly perfected the art of defeating claim payments, but given the scale of Katrina, this simply wouldn’t do here. The situation demanded that the smartest guys in the room come up with a solid mitigation strategy. Continue reading “Federal Flood Coverage, A Love Story”