The Gulf Coast was full of legal activity again last month, with controversial verdicts and leaked information involving the handling of claims by insurance giants State Farm Insurance and Allstate Insurance after Hurricane Katrina.
State Farm is facing trouble over several potentially incriminating e-mails that came from inside a forensics company contracted by State Farm to submit engineering reports for damaged homes in the aftermath of Hurricane Katrina.
The e-mails recently were posted on the web site of the Scruggs Katrina Group, a legal team who is handling many of the lawsuits stemming from insurance claim denials from Katrina. The group asserts that State Farm either denied claims or attributed damages to flooding in order to avoid paying high-dollar claims.
In the e-mails from Forensic Analysis & Engineering Corp, which were first obtained by the Associated Press, there is a discussion of ethics between the company's vice president, Randy Down, and the company's president, Robert Kochan about State Farm's alleged influence over language contained in the engineering firm's reports.
It's not the first time State Farm has faced accusations of conspiring with forensic companies' reports. Last year, the company faced a 600-member class-action lawsuit over improper denial of insurance claims in Mississippi. The complaint alleged that State Farm and another engineering firm, Haag Engineering, prepared and circulated a generic, one-size-fits-all engineering report to its adjusters that concluded all damage was due to flooding. The suit was settled by both parties several months ago, but a final settlement has yet to be approved by Judge Senter, who is overseeing the case and has already twice dismissed proposed agreements.
Meanwhile, Allstate received its own bad news in a case brought by Louisiana homeowner Robert Weiss. Ruling against Allstate in late April, a federal jury awarded Weiss policy limits of $561,000, plus a whopping $2.25 million in damages and penalties. The case involved a dispute of wind vs. water damages, and the judgment was reported to have hinged on a forensic engineer who submitted a report on the cause of damage before he had visually inspected Weiss' home in person.
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