I reckon the folks at McKinsey and Company didn’t check with a lawyer before designing that new fangled way of adjusting insurance claims…


Sometimes a quick video clip says it all. Texas law requires insurance adjusters to be “open and honest” with homeowners and deal with them in a way that is “fair and reasonable.” But insurance companies regularly fail to abide by their legal duties to homeowners. And in this deposition footage, a home insurance adjuster just can’t explain why he has so much difficulty understanding the law.


Pass the popcorn (and the Rebel Yell)


The plaintiff’s property was located on the Jordan River in Bay St. Louis, Mississippi which endured the pounding winds of hurricane Katrina’s northeast side for hours before the eye wall crossed it and then endured many more hours of wind after the eye passed. Eventually, storm covered the property, but not before the property endured the maximum sustained winds well as one of the longest periods of sustained hurricane force winds in recorded history. During this onslaught, their entire property was destroyed on August 29, 2005, and the plaintiff’s lost all of their personal possessions located upon the premises as well. [See photo as Exhibit A].

Plaintiff’s reported their loss to State Farm, through its national call center while they were still evacuated in Northwest Louisiana. State Farm eventually assigned adjuster, Heather Keyt, an inexperienced adjuster to adjust the plaintiff’s claims. Ms. Keyt quickly recommended that the claim be denied without supporting evidence except for a alleged report by the plaintiff on the cause of the loss being storm surge

….when asked to explain how she came to determine that the house was a total loss due to flood, Ms. Keyt’s consistent and yet unreliable “fact” was a description made in the initial claim recorded by State Farm at its national call center received immediately following Hurricane Katrina. This section of the claim file that maintained the initial information is referred to as the “Facts” section. [Exhibit F].

Mark Flores, one of the insureds and a joint owner of the home, made the initial reporting of the claim. Mark Flores was evacuated to Natchitoches, Louisiana, approximately 40 miles from the Texas border, at the time he made the call to make a claim, and could not have known the cause of the loss of his home. [Exhibit G; Mark Flores depo., pp. 13-14]. Continue reading “Pass the popcorn (and the Rebel Yell)”

Still got some popcorn? Grab a chair and watch State Farm's training video – "Which Was It…Wind or Water?"

In Flores et al v State Farm, “The initial focus of the punitive liability of State Farm is on its adjuster Heather Keyt… One specific educational source that was identified by Ms. Keyt was an instructional video on “how to tell the difference” in causation questions over wind versus water”.

State Farm has not produced that video under an assertion of some proprietary argument. That video is not under seal, but was disclosed in the case of Watkins v. State Farm Fire & Casualty Co., #CJ- 2000-303, Grady County Court (Ok. 2007), and is entitled “Which Was It … Wind or Water?”

In…[Part 1 @ 7:05 of the three-part]…”video the instructor suggests as a general rule that to determine the cause as either wind or water, “go across the street, lean against your car look, at the building, and ask yourself, which was it wind or water?”

This general suggestion is consistent with the testimony of Ms. Keyt, and it forms the framework for the inspection that was conducted by State Farm’s adjuster.


The Flores’ plaintiffs “Response Brief in Opposition to [State Farm’s] Motion for Summary Judgment” is more than just pictures worth a thousand words.  The discussion of related Mississippi case law on Good Faith and Fair Dealing and the Summary Judgment Standard applied to Punitive and/or Extra-Contractual Damages is thorough: Continue reading “Still got some popcorn? Grab a chair and watch State Farm's training video – "Which Was It…Wind or Water?"”

Grab the popcorn – Video depositions of State Farm adjusters hyperlinked in plaintiffs' Response

Enter stage left: Rachel Savoy – seasoned adjuster of the policyholder’s claims under both their Flood and State Farm policies (Taranto v State Farm)


Q: …Can you give me a description of what, in you experience and knowledge of adjusting claims, what does concurrent causation mean to you in handling a claim?
A:  Any loss that occurs with the covered loss and a non-covered loss whether it be before or after or during is not covered. [Exhibit C; Savoy depo at pp. 32-33; http://bit.ly/bAjCJ1].

Savoy further explains the application of the concurrent cause part of the policy,

Q. OK and when you say that something is not covered if the cause of the loss is combined to create a loss in any sequence of events; is that correct?
A. That’s my understanding.
Q. Ok. And is that a method with which you have applied the concurrent causation exclusion over your experience over the eleven, twelve years?
A. Yes.  [Exhibit C; Savoy Depo at p. 33; http://bit.ly/aOCPI8].

Compliments of Anita Lee’s blog in the Sun Herald, we have An entertaining legal brief? You bet.  The briefs – Plaintiffs’ Response Brief in Opposition to Motion for Summary Judgment (Toranto et al v State Farm) and Plaintiffs’ Response Brief in Opposition to Motion for Summary Judgment (Flores et al v State Farm) are as solidly grounded in law as they are innovative in format. Plaintiffs in both cases are represented by Mississippi attorney Darryl Gibbs with Louisiana’s John Denena Pro Hac Vice. Continue reading “Grab the popcorn – Video depositions of State Farm adjusters hyperlinked in plaintiffs' Response”

I’ve been waiting for a chance to post this for a while…….

There is a method to my madness and thanks to Mr Steve Theriot and his band of thugs on Parish Council  I have a chance to properly introduce the Slabbed Nation to Angela Russell. But before I get to Angela, how about a word from our sponsor, Ed Rust’s State Farm.


Those of us that follow Angela know her best these days for being prolific on Twitter and her following is impressive. Like so many Slabbers on August 29, 2005, Angela’s life changed profoundly due to catastrophe. Just months earlier on February 24, 2005 Continue reading “I’ve been waiting for a chance to post this for a while…….”

BREAKING: Corban v USAA settles

Anita Lee has all the scoop as the wind water debate rages in the commentary to her story. I suspect, given the related Mississippi Supreme Court decision, USAA paid up big. (Our exhaustive coverage of Corban can be found by clicking here.) Sadly for the public, we will not get to see Mr Haney lose another big case for USAA like Lisanby. Congratulations to the Corbans and their legal team of Judy Guice, Buddy Gunn, Flip Phillips and Chris Van Cleave. Rather than quote the news story lets visit with Anita’s blog for her take on the news:

The landmark Katrina case, Corban vs. USAA, has settled on the usual “undisclosed terms.”

The case established that wind damage is covered even if water contributes to the loss, a fact insurance companies tried to fight after Hurricane Katrina.

The Mississippi Supreme Court decision came in October 2009, far too late to help countless policyholders who settled under an erroneous federal ruling that came down much earlier.

The 5th U.S. Circuit Court of Appeals could have certified the question to Mississippi’s Supreme Court, which has say over state-governed insurance contracts, but chose not to.

The federal legal system, in fact, has let down policyholders in more ways than one. Magistrate Judge Robert Walker in particular Continue reading “BREAKING: Corban v USAA settles”

Sam if it is a fight you want bring it on. Disconnect remains on display at the National Underwriter.

Of all the other blogs that we’ve linked, National Underwriter Editor in Chief Sam Friedman’s blog certainly resides in our top 5 for mentions here at Slabbed.  We link Sam because of many of his insights are keen and because we respect his sincerity. I’m also certain Sam does not know what to make of this blogger, a hard hat CPA from the Mississippi Gulf Coast with a penchant for delivering hard-hitting comments.  They must hurt to the core as Sam can’t bring himself to publish some of my missives even though they were non profane and directly salient to his blog topics.

Last July I took Sam to the woodshed here on Slabbed despite the respect we accord him and his trade journal but it was equally clear from his comment on my post he simply doesn’t get it. Of course I didn’t have to email Sam that post as the National Underwriter is a frequent guest here at the Do Slabb Inn along with every major insurer and investment bank in this country as we’ve dutifully detailed the systemic corruption of Wall Street and follow the money to their pet politicians and regulators.

Sam is still at it as he has morphed from journalist to cheerleader. I don’t know if Sam views himself as that mythical insurance adjusting teevee superhero he pumps but I do know if he is spoiling for a PR fight he doesn’t have to look very hard to find an opponent that is not incentivized in the system.

We don’t have hundreds of millions of dollars to spend on shills like Robert Hartwig or trade groups with oval office connections. And I can’t imagine  that the average editorial board at the local newspaper would see me or Nowdy on a walk in basis to hear us speak about an esoteric topic such as insurance finance. Such access is reserved for folks like Hartwig. But we have something none of the shills possess and it is called the truth. In today’s day and information age it is indeed a mighty sword. Continue reading “Sam if it is a fight you want bring it on. Disconnect remains on display at the National Underwriter.”

USA Ex Rel Rigsby v State Farm: An analysis of the McIntosh Claim: Updating the original post Not to belabor the point

In response to the re-run of our archival post not to belabor the point, which originally ran on April 7, 2009 a reader sent in some observations referring us to documents we already linked which gives us the correct flood level at the McIntosh property.  I actually did the research on the official flood levels for a companion post to the original (which never ran) so I am happy for the steer, especially since we had all the data.

Before we get to the pictures it and the original text of the post (as corrected) it would help to revisit with State Farm’s own experts, a dubious lot as a whole that often has trouble keeping their lies straight. In particular we are going to focus on one “rent-a-doc” in University of Florida Engineering professor Robert G Dean. It is with Dr Dean’s own report, which we linked originally in this post that we begin:

As seen in this figure, the elevation of the McIntosh property is approximately 14 feet. Menhennett (2007) conducted a survey at the McIntosh property and found that the adjacent ground elevation ranged between 12.5 ft and 15.4 ft, the top of the bottom floor of the residence was 16.5 ft and the slab of the connected garage was 14 ft. Figure 4 presents the FEMA-developed Advisory Base Flood Elevations and any High Water Marks (HWMs) in the general vicinity. Two HWMs are identified in Figure 4 and adjacent charts that are in reasonable close proximity to the McIntosh residence and their elevations as determined by survey and other characteristics are summarized in Table 2.

Dean’s choice of watermarks is interesting as one of the official measurements was taken literally within feet of the McIntosh property which in my mind makes his second choice, from over a mile to the south irrelevant. Already having one data point, which is the elevation of the McIntosh house at the top of their slab, all it takes is a trip down Dr Dean report to the official watermark measurements to find the flood level on the ground at water mark reference KMSC-02-21 was 18.6 feet which means there was 2.1 feet of water on the outside of the McIntosh residence above their slab. That is important because it would include any wave action. I am told the proper forensic engineering technique is to take inside water mark measurements.  You won’t see any such reference to that data point in Dr Dean’s report. With that point made here is the text of the original post as corrected.

….Pictures are truly worth 1000 words. For instance take these from our archives of the McIntosh residence which is one of the focal points in the False Claims Act lawsuit against State Farm. There was around 4 2 feet of water inside the residence when the storm surge peaked in the Biloxi Bay several hours after Hurricane force winds began blowing.

mcintosh-exteriorRemember the neighbors said the house next door blew apart and into the McIntosh residence which in turn breached its structural integrity. I wonder whose roof trusses are in the picture? The McIntosh residence still has its roof and there is no house between them and the water. Continue reading “USA Ex Rel Rigsby v State Farm: An analysis of the McIntosh Claim: Updating the original post Not to belabor the point”

Play it again Sam. No Amount of PR will cover what insurers did to the people here after Katrina.

However, that doesn’t stop Sam’s man of integrity, Robert Hartwig’s and his spin meisters at the Insurance (mis)Information Institute, from dismissing a recent Consumer Reports survey that found half of the Katrina impacted residents that responded had trouble with their insurer with a full 26% saying they were under paid. The National Underwriter has the story and related III spin (h/t Editilla):

Half of Consumer Reports’ readers who filed insurance claims resulting from Hurricane Katrina in 2005 said they had problems with their insurer, the magazine reported.

In the September issue of the consumer watchdog’s magazine, the organization says 26 percent of its readers also complained that they were paid too little for their claims.

“A disaster tests everyone, and in the eyes of our readers insures often failed that test,” the magazine said. Continue reading “Play it again Sam. No Amount of PR will cover what insurers did to the people here after Katrina.”

The Kodrins Take the 5th to the Supremes

I saw this breaking story on the case of Kodrin v State Farm show up in our Times Picayune RRS feed and immediately recognized the case since we covered it extensively. (here, here, here, and here) It was also the case where I exposed Rossie as a Katrina legal charlatan as his penchant for letting State Farm ghost write his blog finally caught up with him.

All that aside I wish I could get empart some hope that the Kodrin’s appeal to the Supremes will amount to anything other than a quixotic effort, after all we are a policyholder blog. Simply put, while we all know State Farm acted in bad faith in how they adjusted the Kodrin’s wind claim simply knowing that fact is not enough; the evidence must be introduced into the trial record and it is largely missing in Kodrin. The first “here” I linked above is what I think history will judge as the definitive post on the topic of Kodrin and getting bad faith cases past the 5th Circuit and our newer readers will also find out what was missing from the Kodrin equation. Without further commentary on my part following is today’s Times Picayune story on the Kodrin appeal to the US Supreme Court:

A Port Sulphur couple who lost their home in Hurricane Katrina has asked the U.S. Supreme Court to reverse a lower court ruling rejecting their assertion that State Farm Fire & Casualty Co. acted in bad faith when handling their claim.

Judy and Michael Kodrin originally sued in U.S. District Court and won a $356,318 award, which included the full value of their homeowners policy plus additional penalties and attorneys fees.

But a three-judge panel of the U.S. 5th Circuit Court of Appeals threw out the penalties and attorneys fees, reducing the overall award to $117,084, out of which the Kodrins would have to pay their own legal fees if they recover no additional damages. Continue reading “The Kodrins Take the 5th to the Supremes”