Folks this is one of our older topics. Before I do a refresher for our newish readers lets catch up with the latest news via Yallpolitics.
Folks this is one of our older topics. Before I do a refresher for our newish readers lets catch up with the latest news via Yallpolitics.
I recently met with a group of political strategists that noticed our little blog in Soggy Bottom and the information exchange was very enlightening for me. I’m as interested in the mechanics of the story as the story itself and the tales I was told of how these folks manipulated the traditional media were very interesting. More than any other skill set these folks had a keen understanding of human behavior which is a shared passion with us at Slabbed.
The garden variety bashing I sometime engage in to drive traffic sometimes obscures the fact Slabbed is in reality a quest for knowledge as in getting all the facts that surrounded the blanket denials of insurance coverage after Katrina no matter where those facts may lead. This may sound elementary, indeed even simplistic, but I’d submit we stand in stark contrast to our own insurance regulators that ignored all the evidence of fraud on part of their corporate benefactors from the insurance industry after Katrina, Mike Chaney even going so far as to attack the Rigsby sisters, who exposed the fraud perpetrated by State Farm on the US Treasury here in Mississippi. This frankly came as no surprise to me, especially after it came out that the lawyer who ran the market conduct study for Mr Chaney left the Mississippi Department of Insurance for State Farm’s Jackson based law firm.
Insurance companies have lots of money to throw around and spend vast sums of money on shills, propagandists and their own in-house PR departments. These folks are mostly rent an opinion hookers that dispense half-truths in furtherance of their own paychecks. Armed with lots of factoids and ready made quotes, deadline pressed journalists flock to them in droves, often uncritically lapping up the intellectually dishonest drivel folks like the III’s Robert Hartwig, who this past summer passed off a bogus poll about the NFIP to the media. To her credit, Becky Mowbray over at the T-P busted Hartwig and frankly I was amused at Mike Chaney’s blatant duplicity in the Sun Herald’s reporting on the same topic. I guess Chaney tells so many whoppers he can’t keep them all straight but that is another post.
I mention all this because Ashby Jones and Joanne Lublin recently wrote a story for the Wall Street Journal on the topic of corporate whistleblowers and the new financial re-regulation legislation which is so full of self-serving corporate PR spin these two journalists should be ashamed, Continue reading “And the Wall Street Journal put two reporters on the story and still managed to butcher it. An Allstate Hurricane Katrina Fraud Update.”
I’ve known Dave pretty much all my life. He comes from a fine family and is a fine choice for the insurance industry advisory board to the NFIP. Being from Bay St Louis he had a ring side seat after Katrina to the myriad of ways insurers defrauded the NFIP for example and witnessed first hand the human toll of the bad faith claims handling procedures employed by certain insurers, so he takes the human equation with him to the quarterly DC meetings as well. Dave’s business acumen means he also has a good understanding of the internal controls needed at NFIP, most notably a bit of oversight, to insure that major retail insurers never defraud the program again.
Anita Lee has all the details at the Sun Herald and in a great example of a broken clock being right twice a day, she even snagged some quotes from Jimbo the Clown’s sidekick, Mississippi Insurance commissioner Mikey “The Cook” Chaney who shares our sentiments about Dave and what he brings to the table. Unfortunately for the citizens of Mississippi, Mikey does not recognize fraud even when it bites him on the ass unless it is an individual defrauding a major multinational insurer. Fortunately for us at Slabbed, Mikey doesn’t know when to shut his mouth but such is a common trait with the political class. We’ll be visiting on him again soon.
Again our congratulations to Dave Treutel and we’re delighted to have in him as our voice within the NFIP. Well done Dave!
Yes, Sop, you heard someone say there was a qui tam hearing today before Judge Vance! It must have been a hoot, too! I wrote about defendant Fidelity’s bright idea to collect any NFIP overpayments from the policyholders paid by the defendants in taproot- digging up the fact. However, my bad for not realizing until today’s Minute Entry that Fidelity was represented by none-other than the self-proclaimed King of Flood, Gerald Nielsen:
Currently, virtually every major participant “Write-Your-Own Program” (“WYO”) insurance company in the NFIP utilizes Nielsen Law Firm, L.L.C. to handle its NFIP-related litigation on a national basis. If one were to run a Westlaw search of the undersigned’s name and the word “flood,” one would find that the majority of all Program caselaw being announced in the country over the last few years lists the undersigned as the attorney of record for the WYO carrier.
Believe me, readers, this is not encouraging! Nielsen likely conceived the convoluted reasoning in the Company’s Answer and Third Party Demand and argued it before Judge Vance today – telling her, “It would be morally correct to sue the homeowners to collect the overpayments.” I bet she thought she he’d lost his scienter – actually, I bet she thought she was hallucinating!
The Minute Entry of the hearing does show she issued an Order ensuring there will be no service of the Third Party Demand until she decides the matter. In a related decision, Magistrate Judge Sally Shushan re-issued the Scheduling Order with notes about matters still to be decided. The biggest issues among the big issues on the table – the Branch Motion to File an Amended Complaint and the limits on Discovery- should be somewhat familiar to readers of the Qui Tam Olympics. The set of slides that follows below introduces the Discovery issues in the context of the Supreme Court’s Rockwell decision:
Digging through the latest filings in the Rigsby and Branch qui tam cases, I began to notice the Branch Defendants’ were using rulings from the Rigsby case in their defense – a strategy that could prove helpful to State Farm’s current defense effort to limit discovery in Rigsby. Coincidence? Probably not given the way Renfroe v Rigsby, the Alabama case, was used for Rigsby qui tam discovery in McIntosh v State Farm.
Games with Judge Acker were child’s play. However, there is only one way to describe games that pit Louisiana Federal District Judge Sarah Vance against Mississippi’s L.T. Senter – a qui tam Olympics with a torch too hot to handle!
The Rigsbys’ qui tam claims are now set for trial. State Farm’s favorite strong arm tactic – a slap suit aimed back at the relators as a counterclaim – has been mooted by severance, with all discovery stayed. In a word, the Rigsbys’ qui tam case is now early stage radioactive. For those of you who care to study the pathology of corporate monopolies, now is the time to tune in, lock your dial and follow State Farm’s every move.
You’ll likely see State Farm agents turn up in hometown newspaper photos, handing a giant copy of State Farm’s check to the fire chief, buying the police department some pricey crime fighting device, or donating education funds to the local school board. As trial approaches, the number and frequency of “Good Neighbor” TV ads in the broadcast markets of the jury venire will double. Typically, these ads falsely portray State Farm as a deeply caring protector of America’s families. You’ll see lots of minority face time, puppy dogs, tearful then happy children and so on. Not much different than the “family values” theme some of our best pimp politicians like to market. That’s what you will see; what’s more important is what you won’t see.
You won’t see the “Shred-it” trucks pulling up to State Farm’s and Renfroe’s lawyers’ offices. (They needn’t go to State Farm’s regional or headquarter offices, they have their own shredders and corporate employee operators. In fact, State Farm shredded copies of altered engineering reports and corresponding invoices right there in their temporary Katrina claims office off Pops Ferry Road). Also, you won’t see State Farm’s creepy data managers systematically scrubbing data off the head office’s mainframes and hundreds of work stations. You won’t see this same thing happening behind the walls of State Farm’s and Renfroe’s lawyer’s offices either, or even within the offices of the federal court in Birmingham. You won’t see crooked law clerks scurrying to isolate and delete phone logs or emails proving hundreds of unauthorized ex parte contacts with State Farm’s and Renfroe’s case lawyers. You won’t see the destruction of records detailing communications with FEMA’s David Maurstad or James Shortly, or with FEMA’s shadow manager, Computer Science Corporation (“CSC”), all to get the proof of loss requirements under the flood program waived, and in place within 48 hours of Katrina. Continue reading “A Corporate Predator”
Michael Newsome has the Sun Herald story:
A federal judge ruled Monday that whistleblowers Cori and Kerri Rigsby can testify in the lawsuit the sisters brought against State Farm alleging the insurer defrauded the government through claims filed after Hurricane Katrina.
U.S. District Judge L.T. Senter Jr. also asked State Farm Monday to turn over details of certain claims that the company filed through the National Flood Insurance Program. The Rigsbys’ suit alleged the company defrauded the federal government by wrongfully denying homeowner’s insurance claims and shifting the burden for the storm’s damage to the taxpayer-funded NFIP.
A previous order in a different case had prohibited the two from testifying in civil suits against State Farm, but the Risgbys had asked Senter whether that would apply to the current proceedings. Senter said the matter at hand was substantially different than previous actions. He said the two, who worked as insurance adjusters for E.A. Renfroe, a company State Farm used after Katrina, “have relevant knowledge” and should be permitted to testify in all further proceedings. Continue reading “The Sun Herald picks up the coverage of Judge Senter’s decision in Ex Rel Rigsby”
CONGRESSMAN GENE TAYLOR
U.S. HOUSE OF REPRESENTATIVES
FOURTH DISTRICT OF MISSISSIPPI
2269 Rayburn HOB
Washington, DC 20515
Fax (202) 225-7074
FOR IMMEDIATE RELEASE
CONTACT: ANA MARIA ROSATO (202) 253-1308
July 1, 2009
Rep. Gene Taylor (D-Miss.): In Court, Insurance Companies Provided Evidence of Fraud
Companies Admit They Shifted Hurricane Katrina Wind Claims to National Flood Insurance Program
Today, Rep. Gene Taylor (D-MS) wrote Homeland Security Secretary Janet Napolitano to bring to her attention recent statements by insurance company attorneys that show beyond any doubt that companies shifted Hurricane Katrina claims to the National Flood Insurance Program that should have been covered by their own homeowners policies.
On June 9, 2009, the Mississippi Supreme Court heard oral arguments on the interpretation of “anti-concurrent causation” (ACC) clauses in homeowners insurance policies. The attorney for Nationwide, Christopher Landau, told the Supreme Court that Nationwide applies the ACC clause to exclude coverage of all damage caused by hurricane winds if subsequent flooding was sufficient to cause the damage.
In response to questioning, Landau answered that even if a house were 95 percent destroyed by winds before any flooding, Nationwide would owe nothing to the policyholder if the flooding was severe enough to have destroyed the house. USAA Attorney Greg Copeland even claimed that it was the intent of Congress when enacting the National Flood Insurance Program that the federal government should pay for all damage caused the combination of wind and flooding.
Randy Maniloff is a very familiar name to us at Slabbed as we’ve seen him used by reporters like Rebecca Mowbray at the Times Picayune as a source for business community legal reaction when she reports on Katrina policyholder cases. I’ve found Randy’s legal analysis (as reported) to be rigorous even in cases where we might not see things quite the same. As such I was honored that he sent us a link to an article he did for the latest issue of the Federalist Society’s Class Action Watch on the implications of the recent 5th Circuit decision reinstating Ex Rel Branch to the current massive money giveaways known as the bailout and stimulus package. He article begins on page 6 of the publication as he sets his piece up but it is on the bottom page 7 were I’ll begin as he gives a brief overview of Ex Rel Branch:
Branch Consultants (2009) has expanded plaintiffs’ ability to bring qui tam actions under the False Claims Act. At issue before the Fifth Circuit was an appeal of the Eastern District of Louisiana’s dismissal of Branch Consultant’s False Claims Act qui tam complaint against eight insurance companies and six adjusting firms. Branch’s claim was based on fraud allegedly committed by the insurer defendants in their role as participants in FEMA’s “Write Your Own” flood insurance program (WYO). Under this program, private insurance companies issue and service flood insurance policies, but any claims are paid from the federal treasury.
In the ordinary course, participating WYO insurers are required to comply with certain FEMA rules to ensure accurate estimates of flood damage. However, following Hurricane Katrina, FEMA was forced to waive certain of their rules in order to expedite payments to insureds. In general, a significant issue in the adjustment of Katrina claims (and source of substantial litigation) was the apportionment between wind damage and flood damage. According to Branch, waiver of the FEMA rules “created a perverse incentive for WYO insurers to understate losses due to wind (which an insurer would be required to pay under the insured’s homeowner’s policy) and overstate losses due to flood, thereby shifting the loss from the WYO insurers to the federal government.”
At the time that Branch filed its qui tam action, a similar action—Rigsby—had already been filed and was under seal—pursuant to False Claims Act provisions. It was alleged in the Rigsby complaint that four insurers in the WYO program “‘made a corporate decision to misdirect and misallocate claims from those of hurricane coverage to flood claims’ payable by the federal government.” The Rigsby plaintiffs made general allegations of fraud against the four WYO insurer-defendants and also made specific allegations of fraud against State Farm.
In the Branch Consultants complaint, Branch—just as the Rigsbys had done—generally alleged that the WYO insurer defendants defrauded the National Flood Insurance Program by improperly attributing wind damage and other non-flood losses to the flood policies subsidized or underwritten by the government. By doing so, the defendants were allegedly able to avoid attributing such losses to causes that were covered by homeowners policies largely underwritten by themselves. Continue reading “Randy Maniloff checks in with a good analysis of the recent 5th Circuit decision in Ex Rel Branch”
Connect the dots. Russell left a big one in his recent post, Where insurance finally meets the big bailout – AIG a massive ponzi scheme?
They [AIG]would sign a reinsurance contract with an insurance company, take a certain amount of money, and at the same time form a side agreement that essentially said: “We will not pay you on this policy.” Why would the insurance company do this: to lower their capital requirements. And since AIG did not perform much in the way of the services, they could kick some of the money back to the insurance company via an offshore entity which would allow the insurance company to write off all the money paid off to AIG, and then accept back part of the money back as tax free profits.
CLS has been leaving dots on the ALL Board for some time – here’s one from October 2007, for example.
Connect the dots in any fashion and they lead to a bottom line “short” on reinsurance in the face of the nation’s largest disaster; a legal storm as claims were denied; and to the scheme for a bail-out from the US Treasury via the NFIP.
In a February 2007 report, Congressional Research Service identified two broad sets of post-Katraina claims-adjustment issues that might be relevant to Congress… One set of these relevant issues is centered on the previously discussed policy language on causation; and, the other…
…is the alleged adverse impact on insureds of computerized claims settlement systems and products. Continue reading “The first bail-out: NFIP accessed by manipulation of construction price data following Hurricane Katrina”