Tag: Qui Tam

Allstate painted (literally) company in a Billion $ Corner – ex rel Sonnier v: FOURTH qui tam Complaint filed against Allstate

And, then there were four – ex rel Rigsby, ex rel Branch Consultants,  ex rel Denenea and, now, ex rel Sonnier v Allstate:

ALLSTATE’s price allowed on wind policy estimates of loss in the State of Louisiana for painting damaged areas was between $0.15 and $0.38 per square foot. However, on NFIP flood policy estimates, ALLSTATE allowed $0.56 per square foot, a difference of between $0.18 and $0.41 per square foot. Thus, if the true and correct cost to repaint flood damaged property was between $0.15 and $0.38 per square foot (i.e., the same cost listed by defendant, ALLSTATE, to paint the same unit of drywall covered under the wind policy issued for the same property by defendant, ALLSTATE, and applicable to the same loss event), ALLSTATE caused the federal government to overpay ALLSTATE between $0.15 and $0.41 for every square foot required to be painted in every NFIP flood policy loss estimate adjusted and initially paid by ALLSTATE but subsequently submitted to the federal government for full reimbursement to ALLSTATE.

Kermith Sonnier, “the Relator is a licensed insurance adjuster with 30 years experience…principal shareholder of Sonnier & Fisher Public Adjusters, LLC, a public adjusting firm based in Lake Charles, Louisiana”.

The allegations in Mr. Sonnier’s recently unsealed qui tam Complaint against Allstate are Plus-Size – over a $1,00o,ooo,000 federal dollars fraudulently by manipulating  multiple costs in claims submitted to the NFIP from multiple disasters in multiple locations over the six year period prior to filing the Complaint under seal on December 10, 2009. Continue reading “Allstate painted (literally) company in a Billion $ Corner – ex rel Sonnier v: FOURTH qui tam Complaint filed against Allstate”

“an olive Branch”? Denenea and Branch agree to consolidate qui tam cases – call for decision on Rigsbys’ Allstate claim!

It’s way too late to do more than link the two responses in oppositions to Allstate’s attempt to dismiss ex rel Branch v Allstate, et al and ex rel Denenea v Allstate and quote the pertinent text from both – sorry, but one thing Rossmiller got exactly right is that “work” really is “the curse of the blogging class”.

ex rel Denenea v Allstate: Relator’s Memorandum in Opposition to Defendant Allstate Insurance Company’s Motion to Dismiss…

The relator intends to consolidate this matter with the Branch relator, which may avoid additional judicial expense as to any potential conflicts on first to file issues between Denenea and Branch. There still exists the issue of first to file as to the present case and Rigsby; however, that issue is either resolved under recent jurisprudence, or should be addressed on a full hearing on the merits of the status of the Rigsby case pertaining to Allstate. The remainder of the motion should be denied for the reasons stated, or that the motion should be converted to a full motion for summary judgment allowing for the full supporting facts to be submitted for this courts consideration. The relator therefore suggests that the motions filed by Allstate be denied.

ex rel Branch Consultants v Allstate, et al Branch Consultants’ Consolidated Opposition to the Motions to Dismiss of Defendants Allstate Insurance Company and Pilot Catastrophe Services, Inc.

Branch notes that Allstate has not taken the position that the later-filed Denenea case has preclusive effect as to this action. Thus, Branch has made no attempt to brief the issue here, and the Court should not entertain any such argument in Allstate’s reply or at oral argument. Branch also notes that, with regard to contents coverage, it does not believe there is overlap between the Denenea allegations and this action because Branch’s claims do not concern that coverage. Branch nonetheless is in favor of consolidating Denenea with this action and anticipates filing a motion to that end.

Definitely, something to think about and, as time permits, write much more about the points made in both opposition briefs.

Larry, his brother Darryl and his brother Darryl take their act to the Qui Tam Olympics

A little background here for new readers and a refresher for others:  Larry, a character on the old Newhart show, spoke for himself and his two mute brothers, both of whom were named Darryl. (h/t Sop for the reminder).  “Qui Tam Olympics” is SLABBED shorthand for the insurance industry’s effort to play Mississippi Judge L.T.Senter and the Rigsby qui tam case against Louisiana Judge Sarah Vance and the Branch Consultants’ qui tam case and, now, the Denenea case too.

Got the picture? Meet the cast.  Although the roles change when to their advantage, at the moment Allstate has taken the role of Larry, State Farm that of one Darryl with the rest of the industry playing the other.

In other words, those in the insurance industry that were  “all in it together” – “it” being “the scheme” of fraudulent claims handling that followed Hurricane Katrina – are still “all in it together” with “it” being a pull-the-wool-over-the-court’s-eye scheme to fool the federal courts into dismissing all three qui tam cases. How do I know?  Well, wet wool smells – some say like a wet dog – and I picked up the scent reading documents filed in all three cases.

Hold your nose and I’ll link this wool-pulling scheme to the scheme and the qui tam insurance defendants that are among “The Ten Worst Insurance Companies in America”– and, if you’ll follow me as I briefly introduce Moffett, et al v Computer Sciences Corporation, et al (Maryland), I’ll also briefly introduce a breath of fresh air, Opperman, et al v Allstate, et al (New Jersey). Continue reading “Larry, his brother Darryl and his brother Darryl take their act to the Qui Tam Olympics”

Branch Consultants file Rock(well) solid opposition to Protective Order – explain why Walker’s Order won’t protect State Farm’s a$$ in Rigsby qui tam

Defendants argue that the Court should adopt Judge Senter’s interpretation of Rockwell and require Branch to prevail at a trial limited to the 27 Exemplar Properties before allowing Branch to obtain discovery concerning other properties…No court has ever interpreted Rockwell to mean that a relator who alleges a long-running scheme has to have direct and independent knowledge of every individual instance of that scheme…

The Branch Opposition alone is 58-pages and there is much more to cover about Rockwell along with a little scienter, a lot about the NFIP, and a  ding-a-ling of an idea for a “bellwether trial”

By definition, a bellwether is an indicator of trends. The term originated from the practice of tying a bell around the neck of a wether (a castrated male sheep) to induce other sheep in a flock to follow the belled-wether…Courts utilize a bellwether approach when large numbers of plaintiffs are proceeding on the same theory or claim and there is no other feasible way for the courts to handle the enormous caseload.

Not only is there is a feasible way to handle the Branch qui tam case – the statistical sampling proposed by Branch that is the litigation standard for identifying fraud in federally funded insurance programs – there’s something slightly creepy about proposing a bifurcation procedure involving a wether to Magistrate Shushan.

Suggesting such a proposed bifurcation models Judge Senter’s decision in Rigsby is really over the top – so is Fidelity’s claim there was no scienter involved in the Company’s adjustment of the Exemplary Property at 2625 & 2627 General Pershing. Continue reading “Branch Consultants file Rock(well) solid opposition to Protective Order – explain why Walker’s Order won’t protect State Farm’s a$$ in Rigsby qui tam”

Walker grants State Farm’s Motion for Protective Order In Part – but part isn’t big enough to cover the Company’s a$$ in Rigsby qui tam

Magistrate Judge Walker’s Order Granting In Part Motion for Protective Order made short work of State Farm’s Motion.  By count, it was a tie on the four points –  one was granted, one denied, and two were split.  However, by what counted most, the Rigsby sisters were clearly the winners.   Take a look at the outcome and see if you don’t agree. If you need a refresher, State Farm’s Motion is linked in Qui Tam Olympics – the protection game: ex rel Rigsby v State Farm and the Relator’s opposition in response can be found in State Farm’s Protective Orders are Dispositive Motions in disguise – more games scheduled for the qui tam Olympics.

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Judge Vance has her Reasons – orders Nielsen to dance with Branch; band is playing fraud

Qui tam plaintiffs move to strike Fidelity’s Third-Party Complaint against its policyholders… Because Fidelity’s claims do not meet the appropriate standard under the Federal Rules of Civil Procedure and because third-party practice is considerably restricted in False Claims Act actions, the motion is GRANTED.

With 24-pages of Reasons supporting her Order, no one can call Judge Sarah Vance a party pooper for turning  down Nielsen’s “morally correct” [sic] Third Party Demand.

Fidelity has filed an answer to Branch’s complaint, and this answer includes a complaint asserting claims against third parties.1 R. Doc. 247. Specifically, Fidelity, acting in its “fiduciary capacity” as a “fiscal agent of the United States,” brings claims against certain of its own policyholders for breach of contract and unjust enrichment, as well as the common-law doctrine of payment by mistake. Fidelity proposes to sue those Fidelity policyholders whose property adjustments Branch put in issue in its complaint against Fidelity. Fidelity alleges that, if Branch proves that Fidelity overpaid its policyholders, these policyholders improperly received payments that are rightfully the property of the United States government.

In a footnote, Judge Vance point out, “These claims are brought by Fidelity only. None of the other defendants has brought a similar complaint against its own policyholders or has filed support for Fidelity’s.”  Surprisingly, however, Judge Vance goes no further.  Since she once again demonstrates mastery of a broad range of controlling decisions in discussing the Reasons for denial of Fidelity’s motion, the obvious assumption is she elected to spare the Company’s counsel, Gerald Nielsen, the embarrassment of revealing his apparent failure to read the Maurstad memo:

FEMA will not seek reimbursement from the company when a subsequent review identifies overpayments resulting from the company’s proper use of the FEMA depth data and a reasonable method of developing square foot value in concluding claims.

According to 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”  In that case, the embarrassment he was spared could just as easily been that his motion was an admission by omission.  In other words, Fidelity Fidelity did not properly use “the FEMA depth data and a reasonable method of developing square foot value”.

Whatever grace Nielsen was extended, however, was short-lives when Vance began the discussion of his motion on its merits: Continue reading “Judge Vance has her Reasons – orders Nielsen to dance with Branch; band is playing fraud”

the good neighbor doesn’t want to play in the McIntosh neighborhood – Part 3: Rigsby sisters designate experts and disclose expert testimony

At your request, we have provided a report that we prepared regarding the Mucha Property at 2558 South Shore Drive, which is located less than 400 feet from the McIntosh house...

As can be seen from my Special Inspection report of the Mucha house, we concluded that the structure of the Mucha house was destroyed by wind before the storm surge of Hurricane Katrina arrived. The Mucha house was subjected to these conditions during the landfall of Hurricane Katrina on August 29, 2005 …

Mr. Mucha…stated that he saw the garage blow apart before 9:00 AM on August 29, 2005. This garage landed in the street in front of the house.

The disclosures of the Rigsbys’ expert witnesses  included the post-Katrina engineer’s report on the Mucha residence prepared by John A Fowler PE, President of Fowler Engineering.

There is over 1,000 feet of unobstructed open marsh behind the house which leaves a very large unobstructed path with for wind to come across the marsh from the south and southeast during a storm and damage the house. This is probably the reason why the Mucha house was destroyed by wind and some of the neighbors’ houses were not. The neighbors’ houses did not have an unobstructed path between their house and Hurricane Katrina as the Mucha’s did. With the Mucha’s house standing for some period of time before it was totally destroyed during Hurricane Katrina, it shielded the other houses in the neighborhood. The other houses in the neighborhood are also at varying angles to one another and shield each other, but this is not the case with the Mucha’s house.

With engineering reports like this replaced with one claiming flood damage, State Farm was unable to keep the whistleblowing Risby sisters down on the Farm.

Little wonder, then,  State Farm filed a Motion for Protective Order to limit the Rigsbys’ discovery to the McIntosh property only. After all, State Farm’s Protective Orders are Dispositive Motions in disguise –  a very thin disguise in the Rigsby qui tam after the Company’s local counsel Robert Galloway tossed his reputation for integrity to the wind in his Reply to the Rigsbys’ Response in Opposition to State Farm’s attempt to conceal evidence of the alleged fraud: Continue reading “the good neighbor doesn’t want to play in the McIntosh neighborhood – Part 3: Rigsby sisters designate experts and disclose expert testimony”

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”

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)”

Qui Tam Olympics – the protection game: ex rel Rigsby v State Farm

Qui Tam Olymics – Defendants’ games pit Judge Vance (Branch) against Judge Senter (Rigsby) introduced the interplay between the Rigsby and Branch qui tam defendants.  The name of the Olympic event currently taking place in Judge Senter’s Mississippi courtroom is the Protection Game –  State Farm hardball versus the Rigsby sisters.  The next post in this series will cover the protection game going on in ex rel Branch over in Louisiana before Judge Vance – hopefully by then I’ll have mastered whatever trick is needed for the slides to run as a show!

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