Monthly Archives: March 2009

Blogging schedule

I’m speaking today and tomorrow at the PLRB conference in Seattle, so blogging will be limited for the next couple days.  What am I talking about? Anti-concurrent cause, what else? If I can sneak in a post before Thursday, I will.

 

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Rigsby update: forgotten but not gone

For those who remember the heady Katrina litigation days of the Ride of the Rigsbys — appearing on ABC’s 20/20, acclaimed as alleged whistleblowers — these times are very different for the sisters. They’ve slipped in the celebrity rankings to a most unenviable category: forgotten but not gone.  The inevitable next stage?  Jointly occupying a corner box in the New, New Hollywood Squares, I suppose, hosted by John McEnroe or some such.

Contestant: I’ll take the Rigsby Sisters for the block.

McEnroe: Kerri and Cori Rigsby. What famous tourist attraction features more than 200 kinds of reptiles?

Rigsby Sisters: Snake Farm!!

Contestant: I’m going to disagree.

McEnroe: The correct answer is the San Diego Zoo. Circle gets the square.  By the way, Rigsby Sisters, you’ve answered either "Snake Farm" or "State Fraud" to every question this week. 

I saw this Anita Lee story in the Sun Herald about the latest on the Rigsbys.  The case brought against them by E.A. Renfroe, a State Farm contractor who did claims adjusting for the insurer during Katrina, a case in which they were utterly routed, is nearing final settlement.  Have I gotten totally out of touch, or are the names under the Rigsbys’ pictures reversed in the story? Not Anita’s fault, someone else other than the reporter does that kind of stuff at a newspaper.  You know your status is in free fall when they put someone else’s name under your picture.  In a month or two, folks won’t even get the Rigsby part right, the cutline under the picture will have the name of some other former celebrity of yesteryear, like, say, Gary Coleman of Diff’rent Strokes

The story has some pdf’s of stuff to do with the winding up of the Renfroe v. Rigsby case in Alabama federal court and an interesting filing from a few days ago in the False Claims Act case, Ex rel. Rigsby, in federal court in Mississippi, which to me appears to be tottering like a 90-year-old guy without his walker. Here’s that pdf.  Looks like more of the same old to me, the usual blah blah about the Brian Ford engineering reports on the McIntosh property and so forth.  You may remember these reports from the unusual detail that the first one attributed all the damage to wind, and strangely enough, Kerri Rigsby herself later wound up greenlighting the flood payment to the McIntoshes.  So there would seem to be some inconsistency there. As Gary Coleman might say, "What you talkin’ ’bout, Rigsbys?"

The filing seems to be a plea to be allowed to engage in discovery before a May 20 hearing on this case before Judge L.T. Senter Jr., and Judge Senter has already said this won’t happen — the basis for the case is supposed to be first-hand knowledge of the massive fraud the Rigsbys allege.  If you read the document, you can see the first-hand knowledge is pretty thin, just a couple of anecdotes. Didn’t see anything in there about Kerri Rigsby approving the flood payment, maybe that will be covered in the next brief. Or maybe the brief will say Gary Coleman approved the flood payment.

All right, so that’s it for this post, except for one more thing.  Let’s finish it off with the newest song I’ve added to my work-in-progress musical, The Katrina Follies.  This song, Don’t Ignore Rigsbys, as I posted about two days ago, appears in the second act, and is sung by the actors portraying Dickie Scruggs and Mississippi AG Jim Hood, to the tune of the Beatles’ Eleanor Rigby.

Ah, look at those two whistleblowers

Ah, look at those two whistleblowers

Don’t ignore Rigsbys

Picked out the fraud from the files where Snake Farm had it hid

That’s what they did

Met in a trailer, accessed computers and lawyers were there

Just ’cause they dared

All the whistleblowers, where do they all come from?

All the whistleblowers, where do they all belong?

 

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Insurance Person of the Year

Nothing like giving the readers a lot of advance notice before an ultra-high stakes award like this is finalized, right? I’m a bit tardy on this, but hey, it’s not like I’m on the advisory board of the Insurance Law Center and might have been expected to post on this more than a day before the contest ends . . . oh yeah, I am. 

Well, in any event, here is a link to the ILC’s Insurance Person of the Year voting, with four big categories: policyholder lawyers, regulators, judges and insurer-side lawyers.  In the last category, I’m surprised no one nominated Dickie Scruggs — he almost did more for State Farm and other insurers, in the long run, than they did for themselves. 

(By the way, I’m almost done writing my musical, The Katrina Follies. Here’s one of the latest songs I’ve written, Don’t Ignore Rigsbys, which is sung to the tune of the Beatles’ Eleanor RigbyThis song comes in early in the second act, sung by the actors portraying Dickie Scruggs and Mississippi AG Jim Hood). 

Ah, look at those two whistleblowers

Ah, look at those two whistleblowers

Don’t ignore Rigsbys

Picked out the fraud from the files where Snake Farm had it hid

That’s what they did

Met in a trailer, accessed computers and lawyers were there

Just ’cause they dared

All the whistleblowers, where do they all come from?

All the whistleblowers, where do they all belong?

Anyway, check out the link, if you care to.  You too can vote for your favorite!  As long as it’s one of the finalists listed.  A veritable Insurance People’s Choice Award.  And don’t worry, you’ve got . . . well, almost two whole days left, until March 18, to get your vote or comment in.

 

   

  

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Kodrin Katrina case: Fifth Circuit vacates punitive damage award against State Farm, upholds verdict of wind damage

Kodrin v. State Farm is one of the Katrina cases, which I wrote about previously here and here.  It was different from many Katrina cases in that, at least as far as what was presented to the jury, there was nothing to sort out about wind vs. water and what damage had been caused by each.  So this is not one of the cases where anti-concurrent cause language became an issue — although as I repeatedly talk about, under the facts of Katrina damage, anti-concurrent cause language should never have been an issue, because the facts of Katrina damage do not support analysis of the damage as caused by concurrent causes. 

I never get tired of saying this: I will be saying it in my speeches at the PLRB conference in Seattle later this month, and I probably will still be saying it when I am a little old man sitting in a rocker in front of the TV complaining about how the neighbor kids are so loud I can’t hear my programs and by the way, why doesn’t the milk wagon come anymore? No set of facts I have looked at — and I have looked at a lot of them — shows that any Katrina damage was caused by anything other than single forces working independently.  A lot of you may have heard this before, so you can skip the rant and jump down to a further discussion of Kodrin, but I think it bears repeating because this point is so easily lost in time.  Homeowners policies insure against damage to property, property has various elements.  Unless multiple concurrent forces cause the same damage to the same element of property, that is, unless they worked together to cause that result and unless it would not have occurred except for the combination, concurrent causes were not at work.

Kodrin is the ultimate in single causation questions: that’s all the jury heard, a dichotomy between the Kodrins’ claim that wind alone destroyed their house, and State Farm’s claim that flood alone destroyed their house.  This may sound like a strange set-up to you, until you look at the facts of the case: the whole neighborhood was hit by Katrina flooding, which washed the rest of the houses off their foundations and kind of pooled them in one location.  These homes, although severely damaged, were not utterly torn down and demolished.  The Kodrins’ home, among all of them, was the only one obliterated. 

This led them to,  as the Fifth Circuit put it in their opinion from a few days ago, "speculate" that a tornado destroyed the house.  Their claim was belied by their acceptance of the policy limits of their flood insurance.  I don’t say this to be a smart alec, but rather because I wonder about this flood payment in Kodrin and a number of other instances: did they give the flood money back or did they keep it? I ask this because the choice before the jury was all wind or all flood, and the jury found all wind. So what happened to the federal flood money?   

The jury, as the first link above shows, felt the Kodrins had been treated unfairly and awarded them the maximum amount under the policy plus punitive damages under Louisiana law.   I’m not sure if I’m adding it up correctly, but it looks like the punitive damages were about $135,000, plus about another $140,000 in statutory attorney fees and costs, not a huge amount in the scheme of things, but the precedent was important to State Farm, I imagine. 

The challenge to the verdict on the damage itself, as opposed to the punitive damage portion, was a steep climb uphill — you have to show that the jury instructions were wrong and prejudicial, and stuff of that ilk.  Most of the time such challenges don’t succeed, and this one was no different.  Even though it wasn’t necessary for the court to parse out causes — because whether you believed it was wind or water that caused the damage, it was presented to the jury as an instance of single force causation — I was pleased to see the Fifth Circuit panel recognized that merely because flood destroys a house does not mean that covered wind damage didn’t previously occur.  This is the example they used, in footnote 15 on page 7:

It is important to distinguish between this dispute over which force totally destroyed a home and cases in which the parties disagree as to the causes of various damaged elements of a home. Distinct elements of damage would have to be considered separately. Flood damaged carpets, for example, would not bar recovery for a wind-damaged roof.

Now, this gives me some hope that this panel gets it when it comes to an understanding of the proper analysis to differentiate between single and multiple force damage: first determine what the loss is.  The example used, flooded carpets and wind-damaged roof, was a fairly common scenario in Katrina damage, but it really doesn’t present any analytical problems, only problems of proof.  The real test of understanding is the realization that the carpet itself, or the roof itself, could be damaged by two single forces that caused separate damage, one covered and one uncovered, and that this does not make them concurrent forces. 

A house is not a unitary phenomenon of property, it has constituent elements that themselves are property.  Constituent elements such as carpet, likewise, are not monolithic, but have various degrees of worth as property — merely because wind tears some pages out of a book does not make the book worthless, although its value might be lessened considerably.  There is still some value there when the book is destroyed by flood — the two forces worked separately to cause separate damage, and the damage from the first force still occurred and caused damage even though the second force would have taken all the value of the book away.  The key is would have: in the hypothetical I pose, that is not actually what happened, and so would have doesn’t matter.  However, as I said, it wasn’t necessary for the Fifth Circuit to consider that issue this time, and so they didn’t, and this is just as well, because explanations from the Fifth Circuit of Katrina causation analysis usually haven’t been that great.

Although the court left standing the jury verdict on property damage, it vacated the award of punitive damages.  The court said, in light of the evidence, there could be an honest dispute about what caused the damage to the Kodrin home.  Again here, I don’t know what happened with the flood payment, whether that was returned or not, or the precise circumstances under which it was applied for, paid and accepted, but the very fact of a flood payment creates an idea in my mind that there could be an honest belief that flood caused the damage. 

Here’s what  the court said about bad faith, when it exists and when it doesn’t: 

State Farm declared that it determined flooding was the more likely cause of the damage to the home because (1) the Kodrins’ neighborhood was inundated when a levee was overtopped during Hurricane Katrina, (2) the Kodrins’ home was just one house away from that levee, and (3) many other houses in the area were lifted off their foundations and destroyed by the floodwaters. The Kodrins themselves acknowledged that their claimed wind damage to their home was unusual in their neighborhood, advancing that a tornado must have caused the damage as their speculation why their home was the only one in the area destroyed by wind, not flooding. On these facts, we perceive no probative evidence that State Farm acted in bad faith. State Farm’s refusal to pay was with reason, even if the jury ultimately rejected that reason. The Kodrins have failed to prove otherwise; they essentially ask this court to find bad faith any time an insurer denies coverage and a jury disagrees. This would unduly pressure insurers to pay out claims that they have reason to believe lie outside the scope of coverage, solely to avoid penalties later. Such a rule would pervert the presumption that insurers act in good faith unless the insured proves bad faith, and this is foreclosed by Louisiana law.

 

 

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Scruggs Nation: Zach is back . . . to the halfway house

The Scruggs Nation has a fever, and the only prescription is more Scruggs. Well, OK, this news story is not about Dickie Scruggs, it’s about Zach Scruggs, not the same, I know, but it will have to do.  Seems like whatever happened with his reporting from prison to the halfway house, it’s not going to be a big deal.  

He was arrested in Oxford, Mississippi, after allegedly reporting late to the halfway house.  His lawyers say he was 15 minutes early instead, so there’s a discrepancy.  According to the story:

The Bureau of Prisons initiated an investigation after people reported seeing Zach Scruggs around Oxford on Feb. 24, the day he was to report to Tupelo. His wife, Amy, had picked him up at the federal prison, and they stopped and had lunch on the Square.

The Bureau of Prisons investigated what route Scruggs took from the prison as well as what he did while on the trip.

If he wasn’t late, it really doesn’t matter what route he took or what he did while on the trip, I would think. Well, anyway, who’s to say?  The world may never know.  The story says he was released from the Lafayette County jail on Monday and is now at the halfway house. 

 

 

 

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‘Partridge’ family reunion: California v. Allstate

I saw this opinion, California v. Allstate, a couple days ago but other things interfered with blogging about it until now. This is a case about coverage for environmental pollution under the "sudden and unexpected" language found in old liability policies, and that is an interesting thing in itself, but what chiefly interested me about this case was the extended discussion of the Partridge case, an influential case that, in days gone by, was in part responsible for the creation of the modern anti-concurrent cause language found in first party policies.

Partridge is not a first party case, of course, but its reasoning resonated beyond the third party liability context, as I discussed in this Appleman’s Critical Issues article on anti-concurrent causation analysis from a couple years ago. (The Partridge discussion starts on page 61).  Partridge was cited in a 1982 Ninth Circuit case, Safeco v. Guyton, that in essence overrode California’s efficient proximate cause analysis in property insurance cases and endorsed a Partridge approach.  (I know that to folks who may not be steeped in this particular aspect of coverage law, this may all sound like secret code at best or Klingon at worst, and maybe it is, but for good or ill insurance coverage has its own specialized language that is an initial barrier to entering the conversation or even following what it is being said.  This is unfortunate in some respects, but it is a fact of life).

What a Partridge approach means is this: whenever two causes of liability exist, as long as one of them is covered, the liability will be covered, even if the covered cause is a subsidiary part of the causation chain and not the efficient or proximate cause. It just has to be a proximate cause.  As the California Supreme Court later found in Garvey v. State Farm, however, the analysis of concurrent causes that might be appropriate for liability cases, where tort law sets the stage for analysis, is not appropriate for first party causation analysis, where the court said efficient proximate cause was the correct analysis. (California is one of just a few states where statutes have been interpreted as mandating efficient proximate cause and precluding the contractual use of anti-concurrent cause provisions). 

But California v. Allstate is a liability case, and Partridge remains good law in California for those kinds of disputes.  Now, it should be said at this point, that not every state has a case like Partridge, and courts in those states may not buy arguments in the liability context based on the reasoning of Partridge, as I have personally found out.  A few words about what Partridge held:  it involved an insured under a homeowners policy that contained, as most or all of them do, an exclusion for liability arising out of the use of a motor vehicle.  The insured committed two negligent acts — filing a gun trigger to a "hair trigger" — so that it would go off with a slight touch, or even, as it turned out, without being pulled at all — and driving erratically, which led to the gun firing and injuring a passenger.  Partridge featured two independent causes, neither one of which could have caused the result by itself.  You can formulate this circumstance in various ways, that is, you can use different words to describe what it is, but the usual way in this context is to say the causes were indivisible, incapable of being separated. 

The Allstate court used the Partridge analysis to find that sudden and unexpected, or accidental,  releases of pollution, which were covered, could not be divided under the facts presented from releases that were gradual and not sudden and which presumably would not be covered.   The court picked this phrase from Partridge as the most apropos: "whenever an insured risk constitutes a proximate cause of an accident, even if an excluded risk is a concurrent proximate cause," liability coverage will exist.  The result, apparently, is that all the pollution liability of the state is covered. 

Before discussing this a little more in-depth, let me just add a curiosity here.  I noted the analysis of the court on the "sudden and unexpected" language with great interest, because in Oregon, a case called Baxter & McCormick has largely read the "sudden" out of sudden and unexpected, and the analysis would have been quite different — if this case occurred in Oregon there probably would not have been a discussion of covered vs. uncovered and concurrent tort causes at all. 

Now, let’s talk a bit about this idea of concurrent cause in the liability context.  I have thought a great deal about this over the past couple years, and there is something intellectually unsatisfying in doing so.  Trying to nail down the analysis in this area is kind of like sticking your arm in water — the refraction makes it appear that your arm has become disjointed and separated from itself.  Likewise, in this area, it can be hard to tell illusion from reality.  One possible conclusion is that there is no reality at all, because the entire concept is artificial and a human construct.  Many things are human constructs, of course, and that does not stop us from thinking of them as reality, or at least reflective of something that is or resembles objectively or empirically observable.  But this area is somewhat different, it seems to me, and less prone to being pinned down, tested or verified.

Consider this, when considering Partridge:  think about the motor vehicle exclusion in the homeowners policy in that case, or a "business pursuits" exclusion in a homeowners policy, or perhaps an earth movement exclusion in a contractors liability policy.  In Partridge, the negligent act of altering the trigger mechanism was found to be a proximate cause. So was the negligent use of a motor vehicle.  But no matter how you see this case, one thing has to be admitted — the use of "negligence" as a cause is particularly prone to manipulation, and I don’t say this with malice, I simply observe that this is so.  Since any court case will involve the actions of human beings, no event that will be considered by a court is untouched by potential human negligence, and this can consume and overwhelm any other attempt at analysis.  If you read the Appleman’s article I linked to above, you can see this, and this was noted by the Fifth Circuit in some of the Katrina cases, such as In re Katrina Canal Breaches Litigation.  

In other words, if a court will let you, you can always attack an exclusion as not really excluding liability because, although it may exclude liability "arising out of" business pursuits, or motor vehicles, or earth movement, it does not specifically exclude human negligence.  So the question arises: is negligence on par with motor vehicle use as a cause? Are these like comparing apples and oranges, or even further apart, like comparing apples to monster truck tires?   Again, I am not taking sides in this, I merely point out that they are not conceptually equivalent.    

One final word, about the Allstate case.  You have reflected by this point in this post that the facts of Allstate and Partridge are not the same.  As the insurers pointed out in briefing, Partridge involved a single, one-time, injury, but Allstate involved various kinds of pollution releases, some sudden and some not sudden, over a period of a number of years.  The court gives an indication it would have given credence to this argument, if the facts would have allowed the court to see the costs of remediation as divisible into costs associated with overflow of the containment pits versus costs associated with gradual seepage from the pits. That is a very hard distinction to make, if you are in the position to have to make it, and all the chemicals come from the same source and are the same chemicals.  It is easier to do this, in environmental work, where, say, one polluter had gasoline at a site, and another had dry cleaning fluid.  Test monitor wells and soil samples will allow a pretty decent estimate of how much of each kind of chemical makes up the pollution mix.  So, not knowing more about this case, on the surface what the court asks to be done sounds incredibly difficult to do.

I do note one other difference with Partridge.  The analysis of the Allstate court does not, at least it appears to me, go nearly as far as some courts do in separating negligence as a cause from actual events, or in other words what we often think of as "causes."  I’m not sure if this different way of approaching the problem is because of the difference in the facts, or if the Allstate court has a somewhat different way of thinking about the issue than did the Partridge court.    

UPDATE: Almost forgot, I saw this case analyzed in a piece by Robert M. Horkovich at the LexisNexis Insurance Law Center.   Full disclosure: I’m on the advisory board of the ILC, so obviously I have a vested interest, I think it’s a good product and I shamelessly plug it when I can.

 

 

         

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Abracadabra: anti-concurrent cause and the search for ‘illusory’ insurance coverage

I was looking through my Bloglines feedreader last night under my folder labeled "anti-concurrent cause," and saw this really good post from the Slabbed blog.   This is a fascinating discussion not only of Katrina damage, but of the theory of illusory insurance coverage.  It’s old, now, the post, from the nostalgia file, but it is still worth talking about.  

Now, as many of you know, in the course of my work I represent both policyholders and insurance companies, so I really don’t have a dog in the fight (apologies to Michael Vick, I know the metaphor might be a touchy subject), and I have no particular ideology when it comes to insurance.  I like insurance theory because it, in many ways, is like Plato’s Allegory of the Cave, in his Republic: it is merely a metaphor for the human condition and the limits not only of attempts to order and describe human behavior according to the logos — rational principles in harmony with the universe  — but also of the limits of human understanding.  The concept of causation, of which anti-concurrent cause theory is a part, and of ‘illusory’ coverage are just some of the shadows on Plato’s cave wall. 

I’m sure that if you go looking for illusory coverage you can find or think of some examples, but as it is discussed in most case law, illusory coverage seems to me a particularly hard-to-pin-down shadow on the wall.  In some ways, the theory of illusory coverage is itself illusory, in other words, and I have great confidence that whatever it is and wherever it is, it is not found in anti-concurrent cause language in insurance policies, at least the way I explain anti-concurrent cause.  So I can’t agree with the premise presented, both by the author, nowdoucit, and quoted material from policyholder lawyer Chip Merlin, that anti-concurrent cause language is in any way ambiguous or illusory. 

The key to what I am saying here is that anti-concurrent cause is merely a causation analysis that is present in the contract and overturns the common law default analysis of efficient proximate cause, and another key is the realization that insurance policy language is full of special definitions and terms of art that are not necessarily the same as English.  This fact of life is because insurance policy drafters attempt to respond, in addition to the changes in the nature and amount of losses, to court decisions.  I don’t see anti-concurrent cause as actually removing any coverage from a policy, but even if it did, this is not a startling idea — exclusions do the same.  A causation analysis just defines the relationship between forces and coverage, it just tells how to apply the language and terms of the policy.   Anti-concurrent cause analysis may take some work to understand, but at it’s heart, it exists to keep uncovered damage from being covered, not the other way around.  Once you accept that, and it is difficult for many to accept, it is a direct route to realizing that the words "concurrently or in sequence," as found in anti-concurrent cause clauses, are words that are not nearly as expansive as might be imagined on first blush, but instead are pretty limited in application. 

I could go on and on about this — I have before and I will again.  I’m going to be speaking about Katrina damage, wind vs. water (in the Vegas line wind is currently a two-touchdown favorite for coverage) and anti-concurrent cause theory and application in Seattle later this month at the PLRB conference.  For reasons I don’t fully understand, I am actually speaking twice, they tell me, on March 24 and 26, I think are the dates.  If you’re there, come to one of the speeches and we can talk about these shadows on the cave wall. 

  

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End days for False Claims Act case alleging massive insurer fraud?

You might recall that one of the central talking points by certain people during the heyday of Katrina litigation was this: insurance companies committed massive fraud on policyholders and federal taxpayers by overstating flood damage that would be paid, up to $250,000, by federal flood policies, and understating wind damage that would be paid from the insurers’ own pockets.

To me this point was like one of those tiny cars in the circus where, paradoxically, a large number of clowns keep coming out of it.  As we’ve since learned, this strategy of claiming this type of fraud was arrived on just after Katrina happened, long before claims had even been adjusted.  Among the chief proponents of this view were, of course, Mississippi AG Jim Hood and his confidential informant, Dickie Scruggs.  They, of course, had their hallelujah chorus of such as U.S. Rep. Gene Taylor, Sen. Trent Lott and many others, all singing the Katrina Fraud Theme Song (which is sung to the tune of The Beatles’ Hello Goodbye):    

You say flood, I say wind

I say fraud, and you just grinned, grinned, grinned

Oh no! You say let’s steal, and I say get real

Let’s steal/get real

I don’t know why you say let’s steal, I say get real

Despite Congressional hearings and other such massive wastes of taxpayer money — hearings that included an assortment of dingbats and moonbats, not the least of which were some of the people on the Congressional committees themselves —  nothing came of all this Wagnerian screeching.  

Now, it has always seemed pretty clear to me that this strategy of claiming fraud on the nation’s taxpayers was simply a way to try to nationalize Katrina issues and put added pressure on insurers to pay more.  One of the legal offensives that supposedly would vindicate these accusations was a False Claims Act case filed by Dickie Scruggs and his "insiders," the Rigsby sisters.  You can ponder the words "False Claims Act" and decide for yourself what the false claims are in connection with this lawsuit: the insurers’ conduct or the allegations themselves. 

This case is the one that people who deal with these Katrina cases all the time refer to as "the Qui Tam," which in Latin of course means "Who’s Your Daddy?" I prefer to call it the False Claims Act case, because I hate to be ruled by the dead hand of Latin, or if I must use Latin, I call it by its name, Ex rel. Rigsby,  which sounds like a great name for a race horse.  This case, you may remember, featured secret meetings in beach trailers to access State Farm files from laptops, it featured the Trailer Lawyers — Trailer Chip and Trailer Tony, Trailer Todd and Trailer Mary — and it featured the flood payment in the McIntosh case, and for the quiz, all you really need to remember about that payment is this: Kerri Rigsby herself approved the flood payment. You heard that right. The only specific example cited in the lawsuit of fraudulent conduct is one where the supposedly fraudulent payment happened because of one of the plaintiffs, or as they call them in this type of lawsuit, "relators." Try to "relate" that fact to the overall allegations: Kerri Rigsby approved the federal flood payment to the McIntoshes.    

I was looking at the docket of this case, and there was an order by Judge L.T. Senter Jr. in mid-February, and here it is. This is a fascinating order, typically brief, well-written and to the point,  which to me appears a clear indication Senter may be getting ready to pull the chain on this thing. Here is what I saw as a key part of the opinion:

In their Amended Complaint, Relators identify two and only two specific instances in which they allege the submission of false flood damage claims: the McIntosh property situated at 2558 South Shore Drive, Biloxi, Mississippi; and the Mullins property situated at 6057 Pine Tree Drive, Kiln, Mississippi. The defendants assert that the Mullins property was not covered by a SFIP and that the SFIP payments made on the McIntosh property were fully justified in light of the flood damage there. McIntosh collected the statutory maximum SFIP coverage on his property, and the individual who supervised and approved this payment was one of the Relators.

My review of the material from the McIntosh case discloses that the McIntosh home was inundated with approximately six feet of water. The house was not reduced to a shell or left as a foundation only by the storm, so there was physical evidence from which the extent of flood damage could be reasonably estimated. Because this is a FCA case and because the McIntosh property is the only property covered by a SFIP and identified in the Amended Complaint, I believe it is appropriate to conduct a hearing on the pending motions to allow the parties to present evidence concerning the question whether the payment of the flood insurance limits in the McIntosh case was justified, as a matter of law.

The hearing will be equivalent to a summary judgment hearing, and the Rigsbys are not allowed to conduct discovery beforehand.  Instead, Judge Senter said he is interested to see what they know firsthand, because supposed firsthand knowledge of fraud by a whistleblower is at the root of False Claims Act lawsuits.   All in all, it looks like one of the last stars in the once glittering Scruggs/Katrina sky is ready to wink out. 

 

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Scruggs Nation: Zach was ‘halfway’ home

You might have seen how Zach Scruggs, whom this AP story describes as "the son of the once legendary civil lawsuit attorney" Dickie Scruggs, was released from prison early to go to a halfway house to  prepare "for a successful return to society." Whoops! Mission Unaccomplished. That successful return to society might have to wait a while.  

I might have edited the description in the first story to say "the disgraced son of the legendarily disgraced Dickie Scruggs," because, hey, The Scruggs is still legend, maybe more so than ever. I mean, let’s face it, give the man his due, Dickie Scruggs is the guy who took down Dickie Scruggs! That’s hard to do. When he was on top of the world, untouchable, he must have been tapped on the shoulder by an angel or something, because, well, you all know what happened — he just up and Scruggsed himself. A public servant, is really what he was.  Against all expectations, he enlisted as a Commander in the Karma Corps, and as he looked down the ranks, there was Tim Balducci standing tall and proud, front and center, reporting for duty.  What I’m trying to say is, that’s legend for you. Balducci and Scruggs, fixing their bayonets and charging toward their destiny.

But there will be more time to talk of Dickie.  You know the sun never sets on the Scruggs Nation — gets eclipsed for a few months maybe, but it never sets.  Now is the time to talk of Zach.  There seems to be some confusion about what went on.  It seems he definitely was arrested by the Bureau of Prisons over some alleged irregularity over his reporting to a halfway house after being released from prison.  This story in the Hattiesburg American says:

Scruggs, 34, was arrested Friday by the Bureau of Prisons and placed in the Lafayette County jail after someone reported seeing him eating on the Oxford Square with his family Tuesday.

As best as I can understand it, the younger Scruggs didn’t report directly from the prison to the halfway house, but instead went to the middle of Oxford, near the old Scruggs Law Office, and had lunch with his family.  Close family friend and former Mississippi AG Mike Moore was quoted in the story as saying  Zach stopped "to have lunch in his hometown and visiting his kids, then people started calling and blogging." Calling and blogging. Sure, it must have been startling, people might have thought they were having flashbacks to the old days, hallucinations, like you walk into a restaurant and you see Winston Churchill having a burger with Lizzie Borden, or something.  Must have had folks checking to see if someone laced their water with PCP. Folks probably didn’t know what they’d see next, maybe Dickie himself bursting through the door in an Elvis get-up, with some fake Elvis hair piled up to the ceiling and gyrating his pelvis while singing Jailhouse Rock, just like in this unintentionally hilarious video, backed by a chorus of jailbirds. 

There seems to be some dispute about what happened.  Some officials say Zach was late reporting to the halfway house, but his lawyers say he was 15 minutes early.  Supposedly, there will be hearing later this week to determine his fate, and at this hearing, I guess we will see if this "15 minutes early" thing is yet another creative flight of lawyer language, the typical Scruggsian prose stylings like the fake and non-existent "insiders" Dickie Scruggs claimed to have in State Farm headquarters in Bloomington, Illinois.  (The fact Scruggs ever claimed this, which he did as a kind of head-fake psych-out strategy against State Farm, shows the danger of believing your own p.r.  It is little known, but about that same time, Scruggs also publicly boasted that he could stretch out his arms, spin them rapidly in a circle and fly like a helicopter).

The story doesn’t contain a direct quote from Moore on this, but paraphrases him and another Scruggs lawyer as saying Zach "arrived 15 minutes before his deadline." Hmmmmm. Is there any wiggle room in that phrase, "his deadline"?  Let’s look at a quote from his other lawyer:

Cal Mayo, another attorney for Scruggs, also said via e-mail, "Mr. Scruggs was released on Tuesday morning and given a time to report in Tupelo. I assume that (the) BOP expects an unescorted inmate on furlough from early morning to some time in the afternoon to have lunch, or at least this would seem reasonable."

Maybe the Scruggs version of a "deadline" includes assumptions of "reasonable" time for lunch and losing track of time.

Well, let’s wrap this one up and wait to see what happens. A final word, the Hattiesburg American story says Scruggs "has landed a job as an office assistant in Oxford as part of the requirements of his release."  Reading that made me think, what became of the old Scruggs Law Office space on the square?  Is it now an FBI training center — the Scruggs Center for Surveillance Studies, or some such? Inquiring minds want to know.      

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Return to blogging

In the past few months, I’ve had about, let’s see, I’ve got the number written down somewhere here, about eleventybillion inquiries about when I am going to return to blogging, why I’m not blogging, if I’m dead, abducted by aliens, living in a Buddhist monastery, etc.  These are fair questions, and the answers are: 

1. I’m returning to blogging starting this evening.  I don’t know that I am going to be able to keep up the pace I once did — blogging Monday through Friday, federal holidays excepted.  More realistically, a couple times a week seems more probable, but we’ll see.

2.  Last year I had a crushing workload, and something had to give. Blogging, although an important life activity and something I really like doing, had to take a back seat.  My workload has returned to manageable levels now, however.  

3.  The worst thing about not blogging? I’d have to say a couple things: not writing any more Trailer Lawyer songs, and not having cause to link to YouTube songs and videos that catch my fancy and which I work into a post. Such as this: last week I became aware that, on a temporary basis, XM satellite radio has a channel devoted purely to ex-Beatle Paul McCartney, who, for reasons I still have not divined from listening to the channel, is now calling himself "The Fireman." Among the songs I heard on this channel is one I have not thought about for years and years, called Junior’s Farm.  Now, this is a fairly strange piece that  contains a weird anecdote, which I confirmed by looking up the lyrics:

I took my bag into a grocer’s store,
The price is higher than the time before,
Old man asked me why is it more.

I said you should have seen me with the poker man,
I had a honey and I bet a grand,
Just in the nick of time I looked at his hand.

At first, it seems like this is an attempt at some kind of social commentary about 1970s inflation, British decline, indifference to the elderly, post-industrial "future shock" and the like: rather unbelievably, multi-millionaire celebrity Paul McCartney is standing in line in a grocery store, and pathetically, an old man starts complaining to him about not being able to afford food. 

But the next few lines tell a different tale — McCartney responds to the old man’s complaints (perhaps a not-so-subtle hint that some celebrity millionaire should buy the old man’s food or maybe even bestow other largesse on him) with a fairly aggressive tale about a recent gambling event.  The point of this gambling story seems to be that McCartney is rich enough that he thinks nothing of betting a grand in a poker game, and what should be more sobering to the old man, McCartney is also the kind of  poker player who doesn’t think twice about cheating to protect his investment, even when he holds a great hand.  The overall lesson? While one might risk appearing uncompassionate in front of others by simply ignoring the old man or saying no, there are any number of ways to make the existential point that ultimately we all face the maelstrom by ourselves and have to find our own way to afford our dinner of Friskie’s Gourmet.  In other words, according to Mac: "I’m not your insurer, old man." 

    

 

 

 

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