In an amazing act of hubris, State Farm asks Judge Senter to certify seal to the Fifth Circus (a Rigsby qui tam update)

Judge Senter’s Order denying State Farm’s Motion to Dismiss the Rigsby qui tam case was Breaking News on the 24th of January. In a different sense, it was also breaking news at State Farm – news that broke the Company’s front line defense.

Shortly thereafter State Farm filed a Motion asking the Court to allow the Company to throw the allegations at a different wall – a motion to certify the seal to the Fifth Circus claiming the Court’s “denial of State Farm’s motion to dismiss due to the Rigsbys’ violations of the seal order presents a controlling question of law, that an immediate appeal would materially advance the ultimate termination of the litigation, and that there are substantial grounds for a difference of opinion as to this question”.

The Rigsbys recently filed a Response. However, before taking a look at the State Farm Memorandum and Rigsby Response in Opposition, a little stroll down memory lane is in order. In his Opinion Memorandum, Judge Senter recognized the significance of the partial lifting of the seal that took place on “January 1, 2007, to allow the Relators to make certain disclosures in judicial proceedings in related but independent litigation in Alabama”:

The order partially lifting the seal does not specify that the judicial disclosures themselves be made under seal, and this order could therefore be reasonably interpreted to authorize these judicial disclosures in pleadings and other documents distributed to the litigants and their attorneys in the Alabama litigation. This type of disclosure would effectively make the original seal of the qui tam case moot. In these circumstances, I consider the relevant period of the seal to be from April 26, 2006, (the filing of the original FCA complaint) through January1, 2007 (the partial lifting of the seal)…and the stay was fully lifted on August 1, 2007.

Judge Senter obviously didn’t think it necessary to provide supporting evidence or he would have mentioned a particularly significant event that took place between the date the seal was partially lifted and the date it was fully lifted some eight months later – the May 30, 2007, Motion to Compel that State Farm filed in McIntosh v State Farm: Continue reading “In an amazing act of hubris, State Farm asks Judge Senter to certify seal to the Fifth Circus (a Rigsby qui tam update)”

Rigsbys seek Order compelling State Farm to completely and promptly produce all 8000 “late-disclosed documents”

On January 14, 2011, more than a year after responses to Relators’ first document requests were due and more than six months after the close of discovery, State Farm disclosed the existence of another 8,000 pages of documents in three boxes labeled “McIntosh Zone Litigation File.” These Documents had been “discovered” in the office of Terry Blaylock, State Farm’s 30(b)(6) witness who was designated specifically to testify on matters related to State Farm’s document production and document retention practices.

State Farm acknowledges that the Documents were “brought . . . to the attention of the State Farm corporate legal department in December 2010” but the existence of the Documents was not disclosed to Relators at that time. Despite the fact that a hearing related to dispositive motions and trial scheduling was to occur on January 12, 2011 and despite the fact that State Farm was taking depositions in this case during the last week of December and the first week of January, State Farm chose not to disclose these Documents to the Relators or this Court. Instead, on January 14, 2011, two days after oral argument, State Farm gave Relators a three-line privilege log that identified these 8,000 pages of Documents simply as “Zone litigation file for
McIntosh claim.”

The January 14 “privilege log” in its entirety provides as follows:

As the Rigsbys point out, “…The “log” contained no description of any of the individual Documents, did not identify by whom the Documents were created or collected, did not identify to whom the Documents were addressed or distributed, and failed to identify any privilege or other protection applicable to any such document”. (Relators’ Memorandum in Support of Their Motion for an Order to Compel Complete and Prompt Production of Late-Disclosed Documents in Scribd’ format below) Continue reading “Rigsbys seek Order compelling State Farm to completely and promptly produce all 8000 “late-disclosed documents””

Judge Senter schedules Status Hearing, Motion filed to dismiss Lecky, State Farm “promotes” routine settlement conference as “significant event” – a Rigsby qui tam “catch all”

Judge Senter wants to talk – or listen or both – and has scheduled a Status Hearing in the Rigsby qui tam case.

NOTICE of HEARING: STATUS HEARING SET for 9/20/2010, 10:00 A.M., in Courtroom 506, Gulfport, MS, before District Judge L. T. Senter, Jr. All counsel to be present…(Docket entry: 9/03/10)

Be assured, there is no lack of topics.  In addition to the yet unanswered Motion to Reconsider dismissal of defendant Forensic (FAEC) filed by the USA, there is also a Motion to Dismiss defendant Lecky King on the table, along with a supporting Memorandum:

Alexis King (“Ms. King”) respectfully submits this memorandum in support of her motion to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(5) for failure to timely serve her with summons and complaint as required by Federal Rule of Civil Procedure 4(m).

SLABBED readers are likely to find the Relators’ Notice of Non-Opposition the most surprising aspect of King’s motion.  I know I did – at first.  However, after giving the matter more thought, I believe the lack of service was a strategic decision of the Relators’ “new counsel”.   Dismissing King personally as a defendant is certainly consistent with the Rigsbys’ Motion to Reconsider Scope of Proceedings in Light of Evidence Adduced in Discovery” – ask Court for additional time to conduct Discovery into “the Scheme”.

The history of attempts to serve King provides support for the Rigsbys’ non-opposition as a strategic decision.  The docket of the Rigsbys’ qui tam case documents the Relators original counsel made repeated attempts at service of process and King’s own motion provides back-up: Continue reading “Judge Senter schedules Status Hearing, Motion filed to dismiss Lecky, State Farm “promotes” routine settlement conference as “significant event” – a Rigsby qui tam “catch all””

Kuehns put State Farm's foot in the other shoe with Motion to Enforce Settlement

At this point in Katrina litigation, it takes a long memory or short search to come up with enough background  to give context to recent developments in a case such as Kuehn v State Farm.

Henry and June Kuehn were among the hundreds of policyholders who attempted to resolve their claim right up to the day the August 29, 2008 SOL would have prevented filing suit.  SLABBED published Double Trouble – Kuehn v State Farm, the first of 20 mentioning the case, the following February.  Sop’s   Henry and June and the Topic of State Farm’s Cancerous Claims Handling: A Kuehn v State Farm Update (Updated) and Well here is another nice mess you’ve gotten me into Part Deux: Judge Senter lowers the boom on the topic of State Farm’s cancerous Katrina claims handling. Slabbed Congratulates Henry and June Kuehn were the last summarizing the issues.

From August 2009 forward, Kuehn v State Farm has been headed to trial on the remaining issues with State Farm attempting to settle.  The Company made two Offers of Judgment, the second this past April, and the case settled – or so it seemed until the Kuehn’s filed a Motion to Enforce Settlement .  Ironically, the sticking point is State Farm’s insistence the terms of the  settlement are confidential – and what we learn is that all along it has been State Farm, not plaintiffs, requiring confidential agreements to settle Katrina claims litigation! Continue reading “Kuehns put State Farm's foot in the other shoe with Motion to Enforce Settlement”

Welcome to SLABBED Louis Guirola, Jr. United States District Judge – Spansel v State Farm

…This evidence, viewed in the light most favorable to the Spansels, tends to show their claim was denied on October 19, before an adjustor had set foot on their property, reviewed photographs of the loss, or received any data other than the property’s location along Bay St. Louis. State Farm management affirmed this denial based solely on the property’s proximity to the Gulf of Mexico. This creates question for the jury as to whether State Farm lacked a legitimate arguable reason for denial of wind coverage under the homeowner’s policy…State Farm is not entitled to judgment as a matter of law on whether it lacked an arguable, legitimate reason for denial.

Because there is evidence that State Farm denied the claim without any adjustment or investigation, a question of fact exists as to whether State Farm acted at least in reckless disregard of the Spansels’ rights under the policy. Therefore, State Farm is not entitled to judgment as a matter of law on this portion of the bad faith claim either.

Next, the Spansels seek a declaratory judgment that the anti-concurrent clause is ambiguous and unenforceable. The anti-concurrent clause is cited in the previous section. State Farm argues that this clause has been held unambiguous and enforceable by the Fifth Circuit. Since that time, the Mississippi Supreme Court has rejected this contention. Corban, 20 So. 3d at ¶48. Corban held that the anti-concurrent clause was ambiguous and unenforceable to the extent that it purported to exclude any wind loss if it occurred separately from and in any sequence to excluded water loss. Id. at ¶¶32, 40-41. State Farm has not shown it is entitled to summary judgment on this portion of the declaratory judgment claim.

Although Judge Guirola granted most of State Farm’s motion, his reliance of decisions made by other members of the court and/or other courts makes his Memorandum Opinion and Order Granting in Part and Denying in Part Partial Summary Judgment extremely interesting reading.  However, before looking further at his Opinion – Order, his Order Denying State Farm’s Motion in Limine to Exclude Evidence merits a mention: Continue reading “Welcome to SLABBED Louis Guirola, Jr. United States District Judge – Spansel v State Farm”

Judge Senter completes his appraisal – Order says Nationwide on wrong side with objection to Lewis O’Leary

Lewis O’Leary is known to SLABBED readers as the  Plaintiff’s appraiser in Kuehn v State Farm.  Consequently, we took note of Nationwide’s objection to O’Leary as the appraiser in a commercial property case and have been following  Sunquest Properties v Nationwide for some time.

Unlike State Farm’s “experts” in Bossier, Mr. O’Leary is qualified to offer testimony under related Mississippi law. Nonetheless, Nationwide wanted to get in the on the act and the “bright lights” of Nationwide legal filed a Motion to Strike Lewis O’Leary as Plaintiffs’ “Competent and Impartial” Appraiser.

… ample evidence of Mr. O’Leary’s partiality renders him unqualified to serve as a “competent and impartial appraiser,” as required by the appraisal clause in Plaintiffs’ policy. Simply put, a person who has been paid to work for several years on the development of a claim and continues to be paid to support that claim, is not sufficiently “impartial” to pass judgment of any kind upon that claim. Yet this is precisely what Plaintiffs suggest in nominating Mr. O’Leary as their purportedly “impartial” appraiser.

Judge Senter ruled on the Motion last week and Nationwide came out on the wrong side: Continue reading “Judge Senter completes his appraisal – Order says Nationwide on wrong side with objection to Lewis O’Leary”

The Corban Conundrum: The elephant in the room (updated)

Plaintiff respectfully requests the Court to stay these proceedings pending
a ruling from the Mississippi Supreme Court in Corban v. United Services Automobile  Association, et al No. 2008-IA-00645-SCT.

The latest development in Politz v Nationwide is the Motion to Stay filed by Mrs. Politz and Nationwide’s Response in Opposition filed today before the  noon deadline set by Judge Senter who shortly thereafter issued an Order denying the Politz motion.

None the less, Corban has been the “elephant in the room” since the Mississippi Supreme Court agreed to hear the case.  At the end of this post is a linked list of background information, including the summary Overview and update on Corban v USAA.

How do you eat an elephant? One bite at a time! Start with this quote from the Appeal and dig in!

…the lower court concluded “the anticoncurrent causation clause will be applied herein as interpreted by the United States Fifth Circuit Court of Appeals, thereby barring coverage under the homeowner’s policy for any damage caused by water as defined in the policy or caused concurrently or sequentially by wind and water in combination”.

One has to wonder how the Fifth Circuit could come up with such a convoluted decision. InPlainly Ambiguous: Have Plain English Laws Made Insurance Policies Less Ambiguous?, David Rossmiller explains that such results are intended. Continue reading “The Corban Conundrum: The elephant in the room (updated)”

On your side – not if you’re Helen Politz: Politz v Nationwide

politz-2...Mrs. Politz, who is sixty-seven years old, has lost everything she owned, has moved three times since Hurricane Katrina, undergone open-heart surgery, taken care of her terminally ill husband until he ultimately died during this litigation, and has had to come out of retirement and go back to work to make ends meet due to Nationwide’s denial of her claim…Plaintiffs Response to Defendant’s Supplemental Motion for Summary Judgment and Memorandum of Authorities (page 2).

Politz v Nationwide was introduced to SLABBED readers in a post of randomly selected Nationwide and State Farm policyholder cases in Southern District Federal Court.  A more detailed review was presented several days later following an Order issued by Judge Senter.

Although covered in the post referenced above, a review of what was learned about the Politz claim from Judge Senter’s Memorandum Opinion of the Order will be helpful to the discussion of Mrs. Politz’s claim for mental and emotional distress: Continue reading “On your side – not if you’re Helen Politz: Politz v Nationwide”

Turbulence in the Mississippi Windpool Association

Turbulence in the Mississippi Wind Pool Underwriting Association propelled its way into federal court in Hattiesburg last week.  The suit is over the Wind Pool Board’s decisions about 2005 reinsurance coverage.

Plaintiffs bringing suit are Association Casualty Insurance Company; Benchmark Insurance Company; Georgia Casualty & Surety Company; and National Security Fire and Casualty Company.

Allstate Insurance Company; Mississippi Farm Bureau Mutual Insurance Company; Nationwide Mutual Fire Insurance Company d/b/a Nationwide Insurance Companies; State Farm Fire and Casualty Company; and St. Paul Travelers Companies are the Defendants.

The case was filed September 15, 2006 in federal court, Southern District Mississippi.  Here’s the docket report, the Complaint, and Amended Complaint.  The background quoted below is from the Plaintiff’s Opposition to Defendant’s Motive for Summary Judgment:

On August 29, 2005, Hurricane Katrina caused widespread damage to life and property when it made landfall on the Gulf Coast of Mississippi. Many of the most vulnerable properties on the Gulf Coast were insured by the Mississippi Windstorm Underwriting Association (―the Association or ―MWUA). Continue reading “Turbulence in the Mississippi Windpool Association”

Treading Water – claims handling in Texas following Hurricane Ike

While the National Insurance Law Forum waited a bit longer than most to ask Hurricane Ike Insurance Litigation: Will it be as bad as Katrina?,  the November 17, 2007 post also suggested the answer.

It didn’t take long for the first bad faith suits arising from Hurricane Ike to be filed in Texas. Last week, the first two Ike bad faith lawsuits that I am aware of were filed in Galveston and Ft. Bend Counties…These are first of several thousand Ike lawsuits expected to be filed across Southeast Texas over the next several years…

The big question being asked by carriers across the country is whether Hurricane Ike will generate the type and volume of litigation generated by Hurricane Katrina. In the three years since Hurricane Katrina, it has been estimated that between 27,000 and 30,000 hurricane insurance suits were filed in southern Louisiana alone. Of the 12,565 suits filed in federal court, only slightly more than half — 7,837 — cases, have gone to judgment or settled.

The seventh edition of the Hurricane Ike Insurance Newsbrief (January 26, 2009) quotes the Texas Department of Insurance reporting that in the three months after Hurricane Ike… over 730,000 insurance claims have been filed and the number continues to rise.

From the policyholder’s perspective, the numbers indicate a mixed blessing.  The longer it takes for a case to get to court the more likely it is that new case law will replace Leonard and other of the 5th Circuit’s poorly reasoned opinions on Katrina litigation.  Chip Merlin’s post on the 5th’s decision in Leonard, Fifth Circuit got it wrong,  points out where the Court’s reasoning failed.

In their rationale…the 5th Circuit provides a less than stellar (okay really absurd) example of non-coverage that virtually all insurance companies issuing an all-risk policy would heretofore pay. After finding that the anti-concurrent causation language was not ambiguous, Judge Edith Jones went too far and provided the following:

If, for example, a policyholder’s roof is blown off in a storm, and rain enters through the opening, the damage is covered. Only if storm-surge flooding – an excluded peril – then inundates the same area that the rain damaged is the ensuing loss excluded because the loss was caused concurrently or in sequence by the action of a covered and an excluded peril…

Where did that come from? Virtually every adjuster and claims manager I have ever deposed with that similar hypothetical situation in a Katrina loss has said coverage would be granted under the all-risk policy for the full amount of the loss…From a practical standpoint, where is there going to be any coverage if the flood policy has the typical exclusions regarding pre-existing loss or “roof leaks or wind-driven rain” as found in the National Flood Policy?

That seems to be one of the big questions in Texas following Ike, according to Thousands waiting for windstorm payments, the article from the Galveston County Daily. h/t Dimechimes. Continue reading “Treading Water – claims handling in Texas following Hurricane Ike”