A judge has declined to dismiss a whistle-blower lawsuit filed against Bloomington, Ill.-based
U.S. District Court for Southern Mississippi Judge L.T. Senter Jr. refused to toss out the suit filed by Cori and Kerri Rigsby, who alleged State Farm and its engineering firms unfairly handled wind damage claims by passing them off to the National Flood Insurance Program in the wake of the storm. State Farm had sought dismissal of the 2006 lawsuit claiming the Rigsbys and their former attorney, Richard “Dickie” Scruggs, leaked details of the case to media outlets in an effort to sway public opinion.
In ruling against the insurer, Senter acknowledged the attorney’s misdeeds, but said disputes over whether damage was attributable to wind or to water were widely publicized before the lawsuit was filed.
“It is abundantly clear that Richard Scruggs and the SKG used formidable public relations resources, including use of The Rendon Group, in an effort to control the public perception of the issue at the heart of this qui tam action, i.e. whether State Farm deliberately mischaracterized wind damage as flood damage in assessing claims under the insurance policies it was adjusting,” the ruling states. “As far as the wind damage claims are concerned, these attorneys were acting well within their rights as advocates for their clients who had homeowners’ policy claims.”
In 2008, State Farm reached a $250,000
“State Farm agents and employees toiled for months in extreme conditions and admirably worked to help Katrina survivors while facing a daily onslaught of charges from the media, politicians and trial lawyers,” said State Farm VP Claims Susan Hood in a statement at the time, noting the company handled more than 295,000 property claims and paid out $3.1 billion as a result of Katrina.
Editors’ Note: "As of this online publishing, Insurance Networking News is attempting to contact State Farm for a statement and will update the story as appropriate."