Tag: Haag Engineering

“When Insurers Hide Behind their Experts in Texas” – Merlin’s blog report case involving State Farm and HAAG Engineering


With Larry and his brothers Darryl following the three qui tam cases, I found this Sergio Leal post on Merlin’s blog relevant to the Rigsby qui tam case against defendants State Farm and HAAG Engineering. Read it here and then visit the Property Insurance Coverage Law Blog.  Chip has it loaded with interesting information.

One strategy insurance companies use to avoid bad faith liability is claiming that they reasonably relied on their experts’ reports to deny a claim. Texas law on bad faith states that an insurer breaches its duty of good faith when: (1) denies or delays payment of a claim for which liability is reasonably clear, and (2) the insurer knew or should have known that liability was reasonably clear. Therefore, insurance companies often argue that because their retained experts concluded that there was no valid insurance claim, liability was not reasonably clear and they should not be found liable for bad faith. Courts typically side with insurance companies on this issue, but sometimes the facts of a case require courts to doubt this argument, just as the Texas Supreme Court did in State Farm Lloyds v. Nicolau, 951 S.W.2d 444 (Tex. 1997).

In Nicolau, a homeowner filed a lawsuit against its insurer for foundation and other structural damage that resulted from a plumbing leak that introduced water into the clay subsoil. The insurer retained an expert, HAAG Engineering¸ to conduct a study on the homeowner’s claim. It was established in Nicolau that the insurer hired HAAG Engineering with the belief that HAAG Engineering generally believed that leaks beneath a house would not cause foundation movement. Continue reading ““When Insurers Hide Behind their Experts in Texas” – Merlin’s blog report case involving State Farm and HAAG Engineering”

Aye Aye Captain Jack. Slabbed opens Davy Jones’ locker and finds an unethical Ed Rust hired gun.

There is a method to the madness here at Slabbed and one of my methods involves periodically revisiting certain news links we post to see if there are any belated comments worthy of follow-up. Such was the case with Anita Lee’s recent story on Chris McIntosh that we highlighted and sure enough there was a late comment by one Captain Jack that I could not let pass since it involves information we’ve been holding onto for at least a year and it is there we begin:

I agree with the other posters here. State Farm should be shut down. The federal government needs to investigate and prosecute. For details about State Farm’s bad behavior and the Oklahoma court ruling for sanctions and contempt against State Farm and attorney David V. Jones of San Antonio, Texas, check out http://badfaithinsurance.org and http://truthaboutmold.info/insurancenews.

Actually Cap there is so much more as the legal profession likes to keep attorneys like Jones as a dirty secret. Fortunately for us we had ring side seats via PACER when Jones enrolled in several Katrina cases involving State Farm in Louisiana including one where the lawyers for the plaintiffs tried to have Jones booted for lying on his pro hac vice affidavit only to have Judge Kurt Engelhardt, David Vitter’s former campaign manager, ignore a clear cut ethical violation. We’ll circle back to that.

Here is the deal from a layman’s perspective since we’ve written a good bit on the use of out of state hired guns. Sometimes an insurer has a case comes along that needs to go away no matter the means or methods.  Since not all of the insurance defense bar are unethical scudda beans sometimes ethical local firms need to be moved out of the way so the right kind of lawyer can come do the dirty work.  It worked for a while with James Robie in McIntosh v State Farm. Robie has hung more than a few skins on the wall for Ed Rust and State Farm but is just one man. Another is David Jones of San Antonio Texas.

There is no view like the view from the top moderating Slabbed and I’ll add it did not take long for Jones long to figure out we were onto him.  Continue reading “Aye Aye Captain Jack. Slabbed opens Davy Jones’ locker and finds an unethical Ed Rust hired gun.”

Compel the cat from the bag of Haag’s “pig in a poke” report – a Rigsby qui tam update

A common scheme “in the Late Middle Ages, when meat was scarce but cats were not…entailed the sale of a suckling pig in a poke” but “the wriggling bag would actually contain a cat”.  A common scheme after Hurricane Katrina was word games like the Haag Report – State Farm’s “cat storm” in a bag that Haag wants us to believe was sold as a “pig in a poke”.

SLABBED isn’t buying the claim that State Farm bought “a pig in a poke” report and neither are the Rigsbys – Relators’ Expedited Motion to Compel Haag Engineering Co. to Produce Documents and Answer Interrogatories Prior to the Depositions of Tim Marshall and Paul O’Connor

Haag’s bright line objection to all discovery requests that relate in any way to events that occurred after October 4, 2005 is improper and the Relators are entitled to the Contested Discovery prior to the depositions of the Haag employees. Accordingly, for the reasons set forth below, the Relators respectfully request that the Court order Haag to produce responsive documents and answer the contested interrogatories at least seven days prior to the depositions at issue. Because Haag has noticed the depositions for April 5-6, the Relators request that the Court order Haag to produce responsive documents by March 29, 2010. However, if that time frame is not reasonable and convenient, Relators request that the Court either (1) require Haag to reschedule the depositions for at least one week after Haag produces the contested documents and answers the contested interrogatories; or (2) allow the Relators to depose the witnesses again after Relators receive the discovery information at issue.

Judge Walkers “bright light” Order , however, was issued on April Fool’s Day and responds to neither request but largely grants the Relators’ motion otherwise:

At present, this lawsuit is proceeding with respect to the McIntosh claim only. As an initial matter, the Court finds that the latest date for discoverable information is the date on which the McIntosh homeowner’s claim was closed. Although the McIntosh flood claim was closed on October 4, 2005, the alleged conspiracy that is the subject of this lawsuit continued beyond the final adjusting of the flood claim; therefore, the relevant time frame for discovery includes the time up to and including the date that the McIntosh homeowner’s policy file was closed. The Court overrules Haag’s objections that seek to limit production to events that occurred prior to October 5, 2005. To the extent that Haag has not provided this later dated material as to any of the discovery requests, the motion to compel is granted. However, the Court notes that it does not appear that Haag was involved in the investigation and adjustment of the McIntosh claim; therefore, it is unclear whether expanding the time frame will result in much additional discovery. Moreover, as demonstrated in its response, Haag has agreed to supplement certain discovery responses to account for some activity and information from October 5, 2005 and beyond.

Since Haag’s attorney Larry Canada was known first as counsel for Forensic (FAEC) in McIntosh v State Farm and the Company is having difficulty maintaining counsel to defend the Rigsby qui tam,I had planned to cover the Rigsbys’ motion in Forked…part 2 as “forked” seemed particularly relevant to an introduction of Canada.  However, “cat in the bag” works, too, but the public hissing contest he attempts as a defense for Haag doesn’t work at all.

The Rigsbys Motion to Compel Haag’s response to Interrogatory No.1 provides the opportunity to examine Canada’s strategy of “hissing” around with word games.  Continue reading “Compel the cat from the bag of Haag’s “pig in a poke” report – a Rigsby qui tam update”

Forked!

We’re back at the fork of the road and continuing with the second part of Forked! “Bifurcation for Dummies”… Our first source document is the 53 pages of correspondence between State Farm’s Butler-Snow attorneys Bob Galloway and Jeffrey Walker and August Matteis attorney for the Rigsby sisters, exhibits from State Farm’s 420-page Motion to Compel.

In the first of this two-part post, we learned State Farm translates “bifurcation” as we go our way and you go both ways” and Matteis takes Judge Senter as a man of his word.   In the remaining two letters, Jeffery Walker fills in for Galloway.  Although no small feat considering the size of Galloway’s e-pistol, Wright condenses Galloway’s points into four pages and fattens the straw man. Clearly, State Farm refuses to bifurcate Scruggs while Matteis presses on with his insistence the first trial is all about the McIntosh claim.

Matteis is so consistent with his fidelity to the Court’s direction that we will also take a look at the Relators’ Expedited Motion to Compel Haag Engineering Co. to Produce Documents and Answer Interrogatories Prior to the Depositions of Tim Marshall and Paul O’Connor and the role roles played by Haag’s counsel, Larry Canada – but first, Continue reading “Forked!”

How ya’ gonna keep ’em down on the Farm after they’ve seen evidence linking Haag and FAEC to State Farm’s fraudulent billing scheme? Part 2: Rigsby sisters’ expert witness disclosures

“SF [State Farm] used pre-conceived notions as to the cause of the damage and directed the resolution of the claim so that the ultimate outcome conformed to that pre-conceived belief.”

The written disclosure of the Rigsbys’ Risk Management expert, Louis G. Fey, continued and identified the first evidence documenting State Farm’s pre-conceived notions as to the cause of damage:

SF obtained a regional engineering study and instructed their adjusters to use that report as a reference or as investigative input at the least or to use it as “the bible” at worst. The industry’s fair claim practices hold that each claim must be addressed on its own merits and no pre-conceived assumptions should be used to influence the outcome.

This “bible”, the Haag Report, was the cornerstone of “pre-conceived belief” that a coordinated effort could reduce State Farm’s exposure by attributing damage to the excluded flood water.  SLABBED examined the Haag Report in the September 2009 post Haag in the Church of What’s Happening Now in Rigsby qui tam.  According to the “bible”, water came before the wind – a prophecy that would be revealed as Haag ascended into State Farm’s Wind-Water Protocol, FEMA’s Expedited Claim Handling Process, and guided by hell’s own angel, Lecky King, into the reports of Forensic’s engineering.

The Rigsbys’ Risk Management expert continued his report stating, “SF failed to meet its obligations to NFIP and FEMA with regard to the proper use of engineers”. Continue reading “How ya’ gonna keep ’em down on the Farm after they’ve seen evidence linking Haag and FAEC to State Farm’s fraudulent billing scheme? Part 2: Rigsby sisters’ expert witness disclosures”

Haag in the Church of What’s Happening Now in Rigsby qui tam

Tim Marshall, storm chaser…drove from his home in the Dallas area to a Slidell parking garage in an extended cab Chevy pickup, loaded down with supplies and technology, to track Hurricane Katrina…

The Sun Herald’s Anita Lee described Marshall, a shareholder in Haag Engineering, as appearing every inch the mild-mannered engineer in his business suit and oversized wire-rimmed glasses on the witness stand. But get him out of a courtroom and it’s like Superman stepping from the phone booth.

Oklahoma attorney Jeff Marr, on the other hand, told Lee, The jury hated him…They viewed him as a professional witness… gave him the consideration his expert opinion deserved and wrote him off.

Following Hurricane Katrina, Haag’s Superman, the professional witness, became a survey-thumping Reverend Leroy holding forth in the Church of What’s Happening Now -Mississippi’s Southern District Federal Court.

Abundant evidence exists to document the role Haag played in State Farm’s claims handling.  The date of the Survey’s publication, on the other hand, only documents the date a published report was available; but, Haag’s post-hearing brief attempts to play word games with the Court:

The evidence [sic] has shown that the Haag Survey did not exist at the time the McIntosh flood claim was adjusted and submitted to the government.

The 30(b)(6) deposition of Marsha Slaughter in Williams v State Farm, taken October 19, 2006, provides a start point for discussing the Haag Survey in the context of State Farm’s claims handling after the storm – contrary to what Haag’s recent [sic] Answer and Amended Answer to the Rigsby qui tam complaint suggests. Continue reading “Haag in the Church of What’s Happening Now in Rigsby qui tam”

Jeff Amy at the Press Register tells the story of Slabbed’s Pro Se Plaintiff, Maralou Richards: “I wanted to find out if the law is really for the people, and it’s really not”

Here at Slabbed, Nowdy and I have split the workload, with me taking press relations and her doing most of our legal profession outreach. From the time of Nowdy’s first post on Maralou Richards last February I figured this unique case would certainly cross over into the traditional media. Time would prove my instincts rights…..just that none of the reporters I emailed with the details would be the one to bring this story to the realm of the mass media. Rather it was journalist that I was previously unfamiliar, Jeff Amy at the Mobile Press Register, that saw the implications and penned a story that well encapsulates the struggles of ordinary policyholders in a legal system that is completely stacked against them. Jeff’s story appears today in both the Mobile Press Register and it’s sister newspaper the Mississippi Press. On behalf of Nowdy and the Slabbed nation we welcome Jeff to the post Katrina party:

It was just another in the rush of federal suits against Mississippi insurers last August, just before the three-year statute of limitations after Hurricane Katrina expired.

Except it wasn’t. Without a lawyer, then-77-year-old Maralou Richards of Ocean Springs filed a handwritten complaint against a unit of AIG, at the time the world’s largest insurance company.

Richards made a confidential settlement in June with Lexington Insurance Co., the court record shows.

But she’s still unhappy. “I wanted to find out if the law is really for the people, and it’s really not,” she said. Continue reading “Jeff Amy at the Press Register tells the story of Slabbed’s Pro Se Plaintiff, Maralou Richards: “I wanted to find out if the law is really for the people, and it’s really not””

Breaking News -Judge Senter’s Order allows deposition of Lecky King in Rigsby qui tam UPDATED with link and comment

There are two types of discovery sought by the Relators, namely documents related to the insurance claim giving rise to this cause of action (referred to herein as “the McIntosh claim” or “loss”), and the depositions of seven individuals (three of whom are associated with the Defendants, with the remainder being witnesses to the McIntosh loss).

Defendants, speaking primarily [268] [269] through State Farm Fire and Casualty Company (State Farm), do not object to producing the McIntosh flood claim file; the McIntosh homeowner’s claim file; any photographs or video images of the McIntosh property in State Farm’s possession; and repair invoices and related materials concerning the McIntosh property.

Obviously, that leaves the issue of the seven depositions requested by the attorneys representing the Rigsby sisters – and that’s where I found Judge Senter’s thinking in the Order for discovery prior to the upcoming pretrial hearing most interesting.

He clearly gave the subject a great deal of thought; but, the question is what was he thinking. My non-lawyer reading about the False Claims Act leads me to believe that had he ruled against the Rigsbys without allowing discovery, his decision would have been ripe for appeal.

I want to believe he allowed discovery, and particularly the deposition of Lecky King, because it is unquestionably the right thing to do.  There will never be the needed healing if the people on the Coast feel the Court has not been fair. Continue reading “Breaking News -Judge Senter’s Order allows deposition of Lecky King in Rigsby qui tam UPDATED with link and comment”

Katrina insurance litigation – selected Nationwide and State Farm cases

Early in the month I began a somewhat regular “sweep” of Katrina insurance cases in the federal court with new docket entries.    In a single day recently, docket entries were made on approximately 75 different cases.  It would be impossible to estimate exactly how many different cases had one or more docket entry during the month of February; but, I’m willing to guess hundreds.

Obviously, someone has to read every one of those new documents.  I’m not the one.  In this short and busy month, it has been difficult at times  to “sweep” my kitchen, much less the case files – so much so, in fact, this could be called a “lick and a promise” post about cases that caught my eye.

Nationwide, you may recall, is the carrier that prompted Judge Senter’s memorable “illusionary coverage” remark.  At this point, it appears the “illusion” morphed into a  “delusion” with Nationwide thinking he would eventually see things their way.  While he has been “on their side” at times, I’ve seen Judge Senter issue an order in several Nationwide cases that I don’t recall seeing elsewhere.  Consequently, I’ve also seen another first, Notice of Private Mediation:

Pursuant to the Court’s January 12, 2009 Order for Mediation, counsel for Defendants Nationwide Mutual Fire Insurance Company, Ntionwide Mutual Insurance Company, and Nationwide Property and Casualty Insurance Company, on behalf of both parties, hereby advises the Court that the parties will hold a private mediation on or before March 19, 2009, in lieu of participating in the Court-supervised mediation program.

Since I don’t want to commit the logical fallacy of suggesting correlation proves causation, I will simply point out I noted a number of Nationwide cases were settled this week.

However, other Nationwide cases I pulled do not appear to be moving in that direction.  Politz v Nationwide , for example, is a dispute about the plaintiff’s private coverage with Nationwide – although you might think  otherwise.  Nationwide focused on NFIP and other disaster assistance the Politz received and did so in a way that its conduct appears contrary to the NFIP Litigation Philosophy: Continue reading “Katrina insurance litigation – selected Nationwide and State Farm cases”

The Scheme: final curtain – who done it (Chapter 7 qui tam)

For what is a man, what has he got?
If not himself, then he has naught.

a good neighbor, the one on your side, good hands people – the relationship between policy holders and their insurer is one of trust. – beginning with trust in the local agent that sells the policy; reflected in trust of the company that follows.

Yet behind the clever slogans and familiar faces lies a culture that views every claim as a potential case of insurance fraud – and trust is replaced with betrayal.  Premium dollars have made fraud detection a separate industry – one with its future riding on the continued public perception of widespread insurance fraud.

Fraud, to be certain, is a serious problem; however, the resulting problem-focused solutions have created far greater problems.

I planned each charted course;
Each careful step along the byway

The industry’s response to Katrina -captured  in Frontline’s The old man and the storm –  has been nothing short of a disaster itself, as this preview of the January 6, 2009 annual update suggests.  The charted course – a  haystack of needles – is an enterprise management system.rate_my_network_diagram2

From an IT management perspective, Enterprise Management essentially means enterprise-wide network administration, which is becoming increasingly complex. The corporate network environment is no longer tied to a single vendor, let alone a single platform. More and more, corporate intranets are multidomain, multiprotocol, multiplatform systems. They contain hardware and operating systems from a number of different, competing vendors… Continue reading “The Scheme: final curtain – who done it (Chapter 7 qui tam)”