Gagne’s got the goods on State Farm, wants more

Don’t be surprised if this post end with a chorus singing Proximo’s song, I WANNA KNOW.  It begins, however, with Judge Walker’s denial of a Motion to Compel filed by Gagne found in the Gagne v State Farm update posted a few days before Christmas.

As an initial matter, the Court finds that the motion to compel is untimely and should be denied on this ground alone. See Local Rule 7.2(B)(2)…In the instant motion, Plaintiff argues partly by inferring from the evidence, but primarily through speculation, that State Farm has conspired to modify or alter draft engineering reports and to deny all slab claims without conducting an investigation. Plaintiff fails, however, to demonstrate with any degree of probability that State Farm is withholding information or documents specific to the Plaintiff’s claim. Thus, there is no basis for granting this untimely motion to compel.

Gagne is back with what the docket lists as a Motion for Review of Magistrate’s Order and 18 exhibits as evidence, leaving little, if anything to speculation other than the court’s response.

Plaintiff, ROBERT R. GAGNÉ, through the undersigned attorney, hereby respectfully files this Motion asking the Court to reverse, in part, Judge Walker’s Order…Plaintiff respectfully suggests that the Magistrate’s ultimate conclusion – that the draft reports are not related to Plaintiff’s claim is a mistake of fact. It is Plaintiff’s position that certain parts of the original Motion to Compel touch on evidence of such a probative and relevant nature to the case at bar that the interests of justice require these documents be exempted from the Magistrate’s ruling and produced to the Plaintiff.

Gagne has limited this request to two sets of documents and I’ll cover the first in total before bringing up the second.

1. The contemporaneous meeting notes taken by the Team Manager (Steve Burke) assigned to Robert Gagné’s homeowners (HO) claim that relate to how to typically handle a slab claim…limited to those notes that were taken prior to October 25, 2005 when Mr. Burke was reassigned out of the South Mississippi Catastrophe area.

Plaintiff and State Farm have a factual dispute as to circumstances that surrounded the denial of the Gagné homeowners claim.

State Farm primarily relies on the testimonial evidence of the Team Manager who took over for Steve Burke on October 25, 2005 – Kirk Angelle and the absence of incriminating evidence in their claims file…

Plaintiff counters with testimonial evidence of State Farm personnel (David Haddock,Dave Randel & Steve Burke), Robert Gagné and objective evidence of communications prior to the Gagné denial…

State Farm asserted in their Motion for Protective Order associated with the Steve Burke deposition that “Mr. Burke ordered payment of policy limits under Plaintiff’s flood policy, but was not responsible for Plaintiff’s homeowner’s claim. (emphasis in original). See Exhibit B Steve Burke’s testimony was not consistent with this assertion. He testified numerous times that he was the Team Manager who supervised Rachael Savoy. That she was the lone adjuster assigned to the Gagné homeowner’s claim. That he was her lone supervisor until October 25, 2005 when he was reassigned outside the CAT area. That he had authority to authorize substantial payments under the Gagné homeowner’s policy. See Exhibit C Burke Deposition

Gagne’s provides another example of inconsistency between testimonial evidence and other evidence.  This second example is related to the existence of draft engineering reports.

Plaintiff asked key witnesses and State Farm, under oath whether draft engineering reports existed. Plaintiff was consistently told no. State Farm denied they existed. John Osteraas, Exponent’s Vice President in charge of the Katrina engineering assignments and the Senior Engineer who signed off on final engineering reports, denied they existed. Joanna Meldrum, who transmitted the one draft report we have documented, denied they existed.

Yet, they do exist. Counsel for Exponent has confirmed that approximately ten non-final reports were transmitted to State Farm. See Exhibit G, Ficenec/Hearin emails.  Exponent has asserted they do not involve slab claims and they do not involve claims inspected by the same engineering team that inspected the Gagné property. Exponent has not been able to clarify whether any of the nonfinal reports involved homes in South Diamondhead, whether reports were ultimately changed as a result of this process and has not been able to clarify why their witnesses have testified thatsuch a process did not existed.

Plaintiff respectfully suggests that such circumstances (multiple instances of testimony denying the process took place) give just that dealt with how to typically deal with slab claims,what the cause of loss was cause for the request for these documents to be made at this time.

A major component of State Farm’s and Exponent’s defenses is that they were two independent entities who did not confer at all about the substance of engineering reports prior to issuing them. That Exponent’s reports were not influenced by State Farm and therefore they can ratify or justify State Farm’s decision to deny the Gagné claim. In fact, upon receipt of Exponent’s report, State Farm again denied the Gagné claim and dug their heels in as to their position that his home in South Diamondhead received no wind damage at all and was in pristine condition when it was floated off of its raised pilings nearly 17 feet above mean sea level. Plaintiff contends that such a decision lacked an arguable basis and was not supported by a proper investigation of his claim.

2. The recently discovered interim/draft/status Exponent engineering reports that were transmitted by Exponent to State Farm, the eventual final report, and any correspondence related to the transmission of the drafts, revision of such drafts, or the rejection of such drafts (i.e., decision to not issue a report altogether) in the possession of State Farm. (emphasis added)

Plaintiff recently came into possession of a series of emails that indicate the corporate representatives and key witnesses have been misleading Mr. Gagné as to the level of communication about the substance of Exponent generated engineering reports. State Farm supplemented its core discovery on December 11, 2008, after the discovery cut-off with the sequence of emails. The supplementation does not address where the home in question was located and does not address the other draft reports. It simply asserts that the claim referenced is not the Gagné claim and concludes it therefore has no relation to the Gagné claim. See Exhibit H, State Farm Supplement to Core Discovery.

Reproduced from Exhibit H Defendand's Supplement Disclosure
Reproduced from Exhibit H (click to enlarge)

State Farm further identifies the non-privileged portions of emails between Joanna Meldrum, Lecky King, Mark Wilcox, David Haddock and Dave Randel produced with a partial claim number that demonstrates that the emails are not related to plaintiff’s claim,bates number GAGR00008479PROD – GAGR00008480, attached hereto as Exhibit “A”.

Clearly Exponent is forwarding drafts to State Farm that are being reviewed substantively by State Farm in October of 2005. (Exhibit J) What happens after they are reviewed by State Farm is unclear, but the evidence that these draft reports were being exchanged is relevant to the Gagné claim…This objective evidence completely contradicts the tenor of the testimony of John Osteraas, Joanna Meldrum, and State Farm given under oath in the case at bar. This testimony is, at best, misleading. To not allow this limited discovery is to reward the wrongdoer and impinge upon Plaintiff’s right to confront and cross-examine key defense witnesses. The fact that there are multiple draft reports going back and forth between the two defendants is relevant because it tends to make it less likely that the testimony denying the existence of such a process was mere oversight. (emphasis added)

State Farm’s original 30(b)(6) representative denies draft engineering reports or information going back and forth between Exponent and State Farm prior to issuing a final engineering report:

Q …Okay And would there be any back and forth between yourself and the engineering firm, a third-party engineering
firm, during the evaluation of the claim prior to the report being issued?

A. No, No…

John Osteraas, under oath, denied that Exponent, Inc. provided draft engineering reports to State Farm.

A.  We — did not provide drafts any of our reports to State Farm.

Joanna Meldrum of Exponent, Inc., under oath, denied access or control over`draft reports.

Q: In your role, were you privy to draft reports?

A. No

This is her testimony, under oath, even though she is the very person who forwarded the draft report that ended up on King’s desk and apparently did this approximately ten times. See Exhibit G, Ficenec/Hearin emails. The current ruling would allow the misleading testimony to go uncontroverted and would result in a harsh injustice to Plaintiff’s rights to a fair trial.

Gagne summarizes the factual basis for the motion; and, among the most compelling IMO is the the inspecting engineer’s report, reproduced in part below.

Plaintiff’s home was reduced to a slab by Hurricane Katrina. State Farm’s own activity log entries indicate that a field adjuster inspected the home on September 17, 2005 and requested an engineering inspection “to determine wind versus flood damages.That inspection occurred on October 6, 2005. The inspecting engineer concluded in his field notes that
“wind caused the catastrophic loss.” On November 11, 2005 State Farm canceled the engineering assignment, denied the wind claim, and sought the investigative materials from Exponent. See Exhibit O

Reproduced from Exhibit N (click to enlarge)
Reproduced from Exhibit N (click to enlarge)

The Homeowners activity log reflects no activity from September 25, 2005 until the cancellation/denial on November 11, 2005… The claims file does not indicate what transpired during that forty-six (46) day period that provided a basis for the outright denial of the claim. Steve Burke was the Team Manager who supervised Racheal Savoy – the lone adjuster assigned to the Gagné HO claim. He acted in this capacity until he left the CAT site on October 25, 2005. Exponent received a memorandum from State Farm to “not write the report” and “forward the investigative materials” on November 11, 2005. Exponent did not forward the investigative materials (Calvin Thomas’ field notes concluding loss due to wind) but instead issued an engineering report 19 days later that ratified State Farm’s denial and prompted a second denial letter from State Farm. That report underreported the likelihood of wind damage and gave State Farm purported objective evidence to support their original denial…

Just recently, Plaintiff was ultimately able to confirm that Exponent,Inc. personnel and State Farm personnel were exchanging draft reports. The one “draft” submission we are privy to was sent from Joanna Meldrum at Exponent, Inc. and ends up on the desk of Lecky King. Once on Ms. King’s desk, Ms. King memorializes her displeasure with a finding of wind – indicating a substantive review of the report prior to its issuance. What happens after such exchanges is crucial evidence that bears on the key issues in this litigation. Plaintiff respectfully suggests that two entities do not exchange reports prior to them being finalized unless they are seeking feedback or collaboration.

Plaintiff suggests the foregoing requires this Court to modify the Magistrate’s ruling and allow Plaintiff the right to review the Exponent generated draft reports, the accompanying correspondence, and the ultimate final reports to determine if these reviews affected the the content and/or issuance of final reports. Furthermore, Plaintiff alleges that Steve Burke’s notes from meeting he attended that dealt with how to typically handle a claim such as the Gagné claim, should be ruled  discoverable as well.

No doubt State Farm will have a response in opposition to this motion – and that should be one really interesting read.

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