Allstate files Answer in Branch – and this I couldn’t make up!

My calendar was marked with the due date for Allstate’s Answer to the Branch SAC (Second Amended Complaint); and, given the Allstate Motion for Extension of Time…and…Page Limits, I expected the “good hands” to mix things up:

In its notice of nonintervention filed in Denenea, the Government stated that ‘with the addition of Allstate as a defendant in Branch Consultants, the question of whether the jurisdictional bar under 31 U.S.C. § 3730(b)(5) is triggered as to either the relator in Denenea or the relator in Branch Consultants arises’…Allstate seeks a ten day extension of the deadline for it to respond to the SAC so that Allstate may address the impact of the Denenea action on the viability of the SAC’s claims against Allstate…

Allstate also respectfully moves for an extension of the page limit…In addition to the issues raised by the Denenea action, Allstate’s motion will address the first-to-file, res judicata, and law of the case issues raised by the Rigsby complaint and this Court’s and the Fifth Circuit’s prior rulings dismissing Allstate under the first-to-file rule.”

Allstate, however, did more than just mix things up.  The Company’s Answer to the Branch complaint reads as if Abbott and Constello were heading Allstate’s legal team and offering who-filed-first as a defense!

One has to wonder what Allstate hoped to gain by making the case for Judge Senter to grant the Rigsbys’ Motion to Reconsider the Scope of Proceedings in the Allstate Answer to Branch:

On April 26, 2006, over three months before Branch filed its lawsuit, different qui tam relators filed a lawsuit in the Southern District of Mississippi against Allstate, State Farm and other insurance companies captioned United States ex rel. Rigsby v. State Farm Ins. Co., No. 1: 06 cv 433 (S.D. Miss., filed Apr. 26, 2006). (See Rigsby Complaint, attached as Exh. A.)

The Rigsby relators alleged, just as Branch does in the SAC, that Allstate violated the FCA by (1) shifting losses from wind to flood so that the government, rather than Allstate, would be responsible for covering the damage caused by the hurricane ( the “loss-shifting scheme”) and (2) overstating the amount of flood damage sustained by a property in order to increase the fees Allstate would be entitled to recover under the NFIP (the “inflated revenue scheme”).

What comes next is stunning and the Company’s decision to include this statement is tantamount to an admission – if not to all, then certainly to those of us who believe State Farm, Allstate and other insurance companies were “all in it together”:

Rigsby alleged that in response to Hurricane Katrina, Allstate and other insurance companies “made a corporate decision to misdirect and misallocate claims from those of hurricane coverage (which a company would be required to pay from its reserves or reinsurance) to flood claims that could be submitted and paid directly from the United States Treasury.” (Id. ¶ 33.)”

As we await the Branch response, I call your attention to the archives of SLABBED and the scheme; the power game, the monopoly game and 6.1 – logic behind the Slabberator that caused some commotion following Hurricane Katrina:

“Denenea” is barely given a passing mention in Allstate’s Answer and the lack of discussion about the case is an omission that raises questions about Allstate’s Answer, the government’s continuing investigation of Denenea’s allegations and the implications of Allstate’s reliance on Rigsby for Nationwide and USAA, co-defendants the Rigsbys also voluntarily dismissed.

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