Mississippi Lawyer Ordered to Release Records to State Farm

May 19, 2008

  • May 20, 2008 at 8:18 am
    Anonymous says:
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    Michael Kunzelman

    Associated Press

    Smiley N. PoolThe dallas morning news
    State Farm threatened to fire an engineering firm if it didn’t have its reports blame water for damage, e-mails say.
    NEW ORLEANS — Attorneys for homeowners suing State Farm Insurance Cos. after Hurricane Katrina long have accused the insurer of pressuring engineers to alter reports on storm-damaged homes so that policyholders’ claims could be denied.

    Now, some of the lawyers say they have evidence: internal e-mails from an engineering firm that helped State Farm adjust claims after the Aug. 29, 2005, hurricane destroyed thousands of homes on the Mississippi Gulf Coast.

    State Farm denies pressuring engineers to change their conclusions, but the e-mails, obtained Tuesday, indicate the company was threatening to dismiss Raleigh, N.C.-based Forensic Analysis & Engineering Corp. less than two months after Katrina.

    State Farm and other insurers say their homeowner policies cover damage from wind but not high water, including wind-driven storm surge.

    Zach Scruggs, an attorney who is part of a legal team that sued State Farm on behalf of hundreds of homeowners, said Forensic turned over the e-mails as part of the pretrial discovery process for one of the lawsuits.

    The e-mails “confirm everything that we have always suspected,” Scruggs said. “What it says is pretty shocking. This outlines the whole scheme of theirs.”

    The e-mails exchanged between Forensic President and CEO Robert Kochan and Randy Down, the firm’s vice president of engineering services, outline complaints against their firm’s work from Alexis King, a State Farm manager in Mississippi.

    Kochan, in an e-mail dated Oct. 17, 2005, says the firm will continue working with State Farm, but he talks about needing to “redo the wording” of a report after a discussion with King “such that the conclusions are better supported.”

    The e-mail also says King didn’t want local engineers to inspect properties because they were “too emotionally involved” and were “working very hard to find justifications to call it wind damage when the facts only show water-induced damage.”

    In a reply dated Oct. 18, 2005, Down questioned the insurer’s motivations. He suggested that on another occasion, State Farm asked the firm to remove information from a report because “they would then have to settle.”

    “I really question the ethics of someone who wants to fire us simply because our conclusions don’t match hers,” Down wrote.

    Mississippi Attorney General Jim Hood, in Washington after testifying yesterday before the Senate Commerce Committee, said he knew about the e-mails for months as part of his criminal grand-jury investigation.

    “It is a document that clearly shows State Farm used engineers and coerced engineers to write a report like they wanted,” Hood said.

    Down, who has left Forensic, said that the threat to fire the company came “out of the blue.”

    “The question was why,” Down added. “The initial internal discussion I heard is that they didn’t like our reports.”

    State Farm spokesman Phil Supple rejected the notion that the company pressured engineers to alter their conclusions.

    “Our employees are committed to conducting themselves in an ethical and appropriate manner,” he said.

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    RE: RE: RE: Yes, but…threatens to expose State Farm Mar 14, 2008, 6:53 pm
    the bad boys Melanie May 12, 2007, 8:16 pm
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  • May 20, 2008 at 8:26 am
    Anonymous says:
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    They say reports that concluded that damage was caused by wind, for which State Farm would have to pay, were hidden in a special file and new reports were ordered.
    OPEN YOUR EYES

  • May 20, 2008 at 11:48 am
    Superjuster says:
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    Tee-hee

  • May 20, 2008 at 12:40 pm
    Diogenes says:
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    As they say in Brooklyn “Oh, how the woim has toined!”
    Notice that State Farm didn’t hire a couple of disgruntled Scruggs employees to get access to information! And they say the insurance companies are the bad guys.

  • May 20, 2008 at 1:02 am
    adjusterjoe says:
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    It is unfortunate but neither of the parties, Scruggs or State Farm, are good guys. Both are part of the slime pit of our society

  • May 20, 2008 at 1:59 am
    Dustin says:
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    Has State Farm actually been charged with criminal activity? They may have mishandled some of the claims during Katrina (certainly not the majority of the claims, as most were handled without problem). I don’t think SF systematically tried to defraud the clients and minimize payments. For the record, I am not a SF employee. Scruggs was the real crook here. Nice to see him get his comeuppance.



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