The McIntosh v. State Farm case was (from a public relations standpoint) the major battlefield of the Scruggs view of the Katrina cases. It was the case the Rigsbys delivered up, because it involved more than one set of engineering reports and infamous postit notes that may or may not have suggested ignoring the first engineering reports and denying the claim. It’s the only case Mike Moore directly appeared in, and he said (in withdrawing from the case in response to a State Farm motion to disqualify) that he was in that one because it was the worst. I’ve occasionally wondered if it was the only case in which the Rigsby documents might suggest State Farm had real problems, but I’ve not got inside those cases enough to be able to tell.
And reading through the pleadings in McIntosh, I saw a lot of throw-it-all-at-the-wall claims that I did not think there was any way would survive long enough to be submitted to the jury. Today, Judge Senter began cutting out the deadwood, granting summary judgment for State Farm and Renfroe on the fraud claims and on a claim that Renfroe owed a special duty to the McIntoshes.
This ruling has been viewed as another epochal event in an epochal case. For that view, check out this interesting Rossmiller post about the ruling, or for that matter, Lotus’s post, here. Both link Judge Senter’s opinion.
As near as I can tell from reading his summary judgment order, he has ruled: 1) The fraud claims go away. This isn’t really a fraud lawsuit. 2) Renfroe owed no particular individual duty to the insureds (the McIntoshes)– that’s the law, and their “employee policies” don’t change that. This seems no surprise to me. He also noted in doing so: 3) The bad faith and extracontractual damages claims stay in the case. In other words, the McIntoshes can go for punitive damages. Here’s the key language:
Plaintiffs contend that State Farm, acting through Renfroe and Forensic, deliberately underestimated the amount of wind damage the insured property sustained in order to minimize its liability under the plaintiffs’ homeowners policy. While this allegation, if sustained, would support a finding of bad faith, it is not sufficient to support an allegation of fraud. Fraud requires reasonable reliance on a misrepresentation, and the plaintiffs have not relied upon State Farm’s evaluation of their claim. Indeed plaintiffs have brought this lawsuit in an effort to establish that State Farm has underestimated the wind damage to the insured property. Although plaintiffs may prevail on the merits of their claims for additional policy benefits and other extracontractual damages, including punitive damages if they establish bad faith on the part of State Farm or its agents, in the absence of any evidence that the plaintiffs relied upon State Farm’s damage assessment I can see no basis for a claim of fraud.
So, the way I read this, punitive damages are left in the case. State Farm’s exposure is still open-ended, and stands a good chance of being in the hands of a Southern District of Mississippi jury. Is this really an epochal win for State Farm? I just don’t see it that way.
I agree NMC. While it does weed out some claims and issues, it leaves plenty in there to keep this case in the dangerous pile for State Farm.
I agree, NMC, but the Fifth Circuit’s decision in Broussard makes it clear that getting punitive damages at trial and keeping them on appeal are two different things entirely. The Broussards got a cool million in punitives at trial and nothing after the Fifth Circuit weighed in.
Well, NMC, I don’t feel all that comfy lumped in with Rossmiller as taking Senter’s ruling as “epochal” for State Farm.
What I said –”Chip Merlin … has inherited a case now down to the bare essentials” — seems to me closer to your interpretation than his.
Is it the word “bare” that bothers you? Bare or not, they’re still essentials and still there.
I’ll re-read your post, Lotus (though I did read it twice while working up mine), but I’d not feel terrible lumped in with Rossmiller instead of me in analysis of insurance cases.
and Law427, you’re right about what a hurdle the 5th circuit will be
Lotus, I read the whole closing passage as implying that Merlin had inherited a substantially damaged case– you wrote: “In short, the McIntoshes’ current lawyer, Chip Merlin (whom, I’ll wager, they wish they’d hired from the git) has inherited a case now down to the bare essentials. Let’s see how he does with it — for the McIntoshes’ sake, I hope "well. "”
Judge Senter makes clear that the facts McIntosh is alleging state a basis for punitive damages and extracontractual damages. If Merlin can prove up those facts (without the Rigsbys and obtaining their documents by other means) he’s going to an SD jury for punitive damages.
So that’s how I read your post. Sorry if I misread it.
I think we read Senter the same way, NMC — thus I italicized the passage of his opinion that you also emphasize. Needed to make that point clearer, I see, but in a multi-mental-channel rush as I posted, I neglected to.
I took lotus’ entry to emphasize Senter’s point that the allegations in the McIntosh case could be bad faith and could justify punitive damages.
That is why I responded that SF will never let this go to trial. Unless they can find an excuse for the 5th Circuit to make it go away, they will settle rather than have this file presented in open court. Better to overpay than to have Lecky King take the stand to explain the documents and emails.
Also, while State Farm’s conduct may not meet the definition of fraud against the McIntoshes, this decision does not address the qui tam claim that State Farm defrauded federal taxpayers by rigging the adjustment and engineering reports to assign everything possible to flooding.
How much money would they throw at it to make it go away, Researcher? That’s the, uh, million dollar question.
I just did a quick read of Rossmiller’s post on Senter’s latest ruling. While Rossmiller continually provides great analysis of the Katrina cases, sometimes I find myself questioning his motivations. His post was a blatant attempt to spin this ruling and call into question the “note” on the engineering report. I understand that reasonable minds can disagree, but sometimes facts are facts. He reminds me of ex-white house Press Secretary Scott McClellan doing his best to tote the party line.
NMC-I’d push for mediation ASAP. State Farm has got about as much as they can out of their motions. State Farm needs to get this one behind them. The McIntoch’s need to have a closure. Chip doesn’t need to spend alot of money in discovery, not sure who is left as an expert who hasn’t written several reports on each property they inspected. In the mediation his arguement will be this will be heard by a local jury, his big minus is the conservative courts if he gets a big punitive award. I would say $1.2-$1.5 M should settle this.