An outside look at the False Claims Act cases: Holding State Farm Accountable (Why McIntosh is Evidence of Fraud)

Occasional slabbed commenter James Barbieri was kind enough to share his May 2009 law school thesis which thoroughly analyzes the 2 False Claims Act cases against Team Insurance Inc and concludes, as this post title indicates, that the McIntosh adjustment is evidence of fraud against the US Government. For anyone interested in this topic it is an excellent read. Given the recent GAO report on continued financial management problems in the National Flood Insurance Program that Nowdy recently profiled and its implications for the previously completed MID State Fram Market Conduct Study and the Department of Homeland Security OIG’s report I was immediately attracted to this passage which shows that people do get it:

……..OIG and the Mississippi Insurance Department (“MID”) have already conducted sufficient post-Katrina claims analysis to warrant reopening all Katrina files.

OIG published results of an audit of 131 combined wind and flood claims. In the Executive Summary, OIG “concluded that the NFIP did not pay for wind damage for structures included in our sample.” But on page six of the same report, OIG provides evidence of NFIP paying for wind damage:

“Based on the review of files in our sample, we did not find material evidence that the NFIP paid for wind damage. Although 44 out of 131 cases (34%) included errors that related to cause of damage resulting in some degree of duplication, e.g. flood and homeowners policies paying for the same type of damage…, only two (1.5%) of these cases clearly identified wind as the preponderant cause of damage, thus resulting in an improper payment by NFIP in the amount of $432,600.”

It is contradictory for OIG to conclude: “we did not find material evidence that the NFIP paid for wind damage” and then reveal “an improper payment by NFIP in the amount of $432,600” in a sample of 131 cases. Extrapolation to the total population of 209,404 Katrina flood claims (on which the Federal Government paid $15,850,563,024) would yield in excess of $600 million in improper NFIP overcharges. Continue reading “An outside look at the False Claims Act cases: Holding State Farm Accountable (Why McIntosh is Evidence of Fraud)”

State Farm defense (mechanisms) growing motion to compel Scruggses to complete deposition

This began as a short update to my earlier post on the Reply filed late Friday by State Farm and a related post on the Response filed by Renfroe – both connecting to my opinion their defense of the McIntosh case was relying on psychological defense mechanisms.

I intended to offer this evidence of my contention the allegations of an affair made in the Oxford depositions suggested Freudian projection.

I don’t know of any carriers that condone relationships between independents and staff… I don’t know what rules were for them on this cat but you can clearly see that it won’t remain a private affair if litigation as ugly as this whole thing takes place…

“…attorneys also asked Senter to block jurors from hearing any testimony that Kerri Rigsby had romantic relationships with a State Farm employee and with a co-worker who also helped State Farm adjust Katrina claims.”

However, before hitting publish and calling it a day, I went back to the McIntosh docket to check a fact and found the Reply growing – three additional docket entries were filed today. Continue reading “State Farm defense (mechanisms) growing motion to compel Scruggses to complete deposition”

Scruggs comes to the Rigsbys' rescue

In court filings today, Scruggs and Scruggs Law Firm moved the court to release the security to satisfy the civil contempt charges.

In order to prevent the accumulation of any additional interest on the judgment, without waiver of the pending appeals and solely to pay the civil contempt sanction awarded in this action, Scruggs requests that the Court direct the Clerk to release to Renfroe the amount of $65,000, plus the interest having already accrued at the interest rate of 2.15% per year (as set out by this Court in the June 27, 2008 Order) from the date of the judgment until today, and release the remainder of the funds back to the Bainbridge, Mims, Rogers & Smith, LLP Trust Account.

But they are not waiving their right to appeal nor their right to recover the money if he wins on appeal.

Although Scruggs will comply with the Court’s order that the civil contempt judgment be satisfied immediately, Scruggs expressly reserves the right to prosecute its pending appeals of the civil contempt judgment to the Eleventh Circuit Court of Appeals, and does not waive any of its defenses. See, e.g., Graddick v. Newman, 453 U.S. 928, 945 n.1 (1981) (“Since property transferred or money paid involuntarily pursuant to a judgment can be recovered, execution of the lower court’s
judgment pending appeal normally does not render the case moot. These cases represent merely a particularization of the rule that issuance of a court’s mandate or obedience to its judgment does not bar timely appellate review.”); County of Dakota v. Glidden, 113 U.S. 222, 224-25 (1885) (“There can be no question that a debtor against whom a judgment for money is recovered, may pay that judgment, and bring a writ of error to reverse it, and if reversed can recover back his money.”); Ferrell v. Trailmobile, Inc., 223 F.2d 697, 698 (5th Cir. 1955) (“We think that the rule has long been established in the federal courts that payment of a judgment, of itself, does not cut off the payor’s right of appeal.”).

Since this release of the money would satisfy the contempt sanctions, I would think that the Rigsbys are off the hook from the court’s latest order on the matter.

Unless the judgment is paid within fourteen (14) days, the court will consider denying
defendants’ motions for summary judgment as a sanction.

Good job, Mr. Scruggs! Good job!

So, they sell Bud and crazy things just keep happening – check this court report

I tell you what, selling Bud really threw this country for a loop – and, as usual, the Coast was hit the hardest. Stands to reason if you figure that desire for a cold one is proportionate to the heat – inside the courtroom and out.

McIntosh has been the hot one for sometime – guess it’s all the back and forth between here and Alabama. Well, today, the “next” I’ve been looking for finally showed up on PACER. It’s the response from McIntosh to the Renfroe motion supporting State Farm’s objection to introducing out-of-state conduct – the subject of a recent post of mine.

My hat’s off to the Merlin Law Group for their response. Actually, my hat’s off because I’m ROFLMAO at their response

COME NOW the Plaintiffs and respond to Renfroe’s Objections to Out of State Evidence (Document 1224).

The Plaintiffs do not intend to offer any of the specified evidence of out of state conduct as evidence against Defendant Renfroe. To the extent that any of the evidence refers to Renfroe,the Court may create safeguards including, but not limited to jury instructions, that ensure that Renfroe is not prejudiced by the reference to it.

That’s it! Every word.

Merlin’s Tina Nicholson did what every lawyer on the Plantiff’s side – here and in Alabama – has been itching to do for almost three years. She filed a motion telling the Renfroe’s this is none of your business. You go girl! Continue reading “So, they sell Bud and crazy things just keep happening – check this court report”

"The past isn't dead" – Walker's order revived State Farm motion; deposition of Scruggses scheduled

After reading Anita Lee’s story on the upcoming deposition of the Scruggs, I pulled Notice to take Deposition of Dickie and Zach from a post Nowdy had in drafts to give SLABBED readers the rest of the story.

State Farm has been attempting since November to take the Scruggses’ pretrial testimony, called depositions, in the McIntosh case. Spokesman Fraser Engerman would say only that the company is seeking the testimony for its defense.

“I’m not sure what State Farm is trying to get at with the deposition,” said the McIntoshes’ new attorney, William F. “Chip” Merlin. “It seems they’ve already gotten their 10 pounds of flesh from Dickie Scruggs and everyone who worked for him.”

As Faulkner said, the past isn’t dead, it isn’t even past – and that’s certainly true in this situation.

Background information is in these posts: Dickie and Zach tell State Farm to find another party and Judge Walker serves the Rigsby sisters to State Farm on Silver Platter.

This is certainly a stalling tactic. State Farm is playing Renfroe v. Rigsby v. McIntosh v. State Farm v. Rigsbys like a merry-go-round until they can sling off. Anything but litigate these cases because they don’t have a leg to stand on obviously.

It’s Time Slabbed Busted a Nutt…

Brown v Nutt that is. Our readers may remember Maria Brown as the horny legal secretary that once worked for Scruggs Katrina Group member Nutt & McAlister. She arrived on the public scene precisely when all hell was breaking loose with the Scruggs criminal indictment telling a tale of sexual harassment in her complaint against the firm including bonus allegations regarding document handling that was used by State Farm and Renfroe in Renfroe v Rigsby.

When Nutt & McAlister lawyer Chris Shapley of the Brunini firm reminded Ms Brown that her work on Renfroe v Rigsby was confidential, she responded by reporting him to the bar and including him as a defendant in her second amended complaint. I’ll be completely honest and disclose the escalation from zero to nasty in 2.3 seconds caused me to wonder if her attorney Louis Watson Jr was mentally retarded. He certainly is no Clarence Darrow.

The allegations all sounded good until Nutt & McAlister filed their response to her complaint including exhibits which revealed Ms Brown as a woman fascinated by the male sexual reproductive organ who would set up sexual trysts with her lover John Doe while on company time. After that response was filed, the federal court ruled against letting her amend the complaint. I imagine the case is on life support but now it is time for the defendants to rise to the occasion and provide more background as John Doe filed for a protective order to prevent further details of his relationship with Ms Brown from erupting into the public domain. Continue reading “It’s Time Slabbed Busted a Nutt…”

The $50,000 question about the downfall of Dickie Scruggs

The amount of the bribe – small potatoes to a man with the wealth of Dickie Scruggs and, as it turned out, sweet ones at that – accounted in large part for the stunned reaction to his indictment captured in the Wall Street Journal interview with author John Grisham.

This doesn’t sound like the Dickie Scruggs that I know. . . . When you know Dickie, and how successful he has been, you could not believe he would be involved in such a boneheaded bribery scam that is not in the least bit sophisticated.”

The juxtaposition of his wealth, the small amount of money involved in the bribe, and a needless crime created a picture that remained out of focus even as he was sentenced.

…the amount of the bribe, in this case, that was paid, $50,000 – – 40,000 actually delivered and $10,000 more written, transferred to Balducci to supposedly give to Judge Lackey…The Court does not feel that $50,000 is – – is a reasonable figure to use in calculating the seriousness of this crime.

While reading around this morning, I found a comment that sharpened the picture a bit. Continue reading “The $50,000 question about the downfall of Dickie Scruggs”

Transcript of the Scruggs Sentencing Hearing Now Online at the Sun Herald

The Mississippi paper furthest from the action has the best coverage today IMHO. Anita Lee once again does a stellar job and even Scruggs fatigued Sop found it fascinating and sobering reading.

And I received these letters from your friends about how sentencing would affect you and your wife and your daughter, and I have sympathy for you in that respect. Your wife, I understand, is a fine lady; and her health is very delicate. But there’ s no question that your wife and daughter are going to be better provided for in your absence than anybody else I ‘ve ever heard that has come before the Court.

(Mr Scruggs falters) Continue reading “Transcript of the Scruggs Sentencing Hearing Now Online at the Sun Herald”

Breaking: Scruggs Gets 5 Years and a $250K Fine (Updated)

Anita Lee has the updated story which contains his reporting date of August 4:

Dickie Scruggs received the maximum 5 years in prison in $250,000 in fines for a crime Judge Neal D. Biggers Jr. called “reprehensible. 

Before sentencing, Scruggs told the judge, “I could not be more ashamed to be where I am today. I realized I was getting mixed up in it and I will go to my grave wondering why. I have disappointed everyone in my life – my wife, family and friends here to support me today. I deeply regret my conduct. It is a scar and a stain on my soul.” Continue reading “Breaking: Scruggs Gets 5 Years and a $250K Fine (Updated)”