Hat-tip to Researcher for word of Judge L.T. Senter’s ruling granting summary judgment to E.A. Renfroe and dismissing Pamela and Thomas McIntosh’s claim of breach of a “duty of undivided loyalty,” as well as a partial summary judgment dismissing the McIntoshes’ claims of State Farm fraud and Renfroe “aiding and abetting.”
As to the claimed breach of duty:
Plaintiffs assert that Renfroe owed the plaintiffs a "duty of undivided loyalty. " The plaintiffs contend that this duty arises from certain provisions of the Renfroe "Code of Conduct " that was applicable to the conduct of Renfroe employees at all relevant times:
CODE OF CONDUCT
RENFROE expects employees to conduct the business of RENFROE in an ethical and legal manner, and to recognize that in all their transactions and at all times they have a duty of undivided loyalty to RENFROE, our clients, and their customers. These obligations demand positive action by all employees to protect those interests and to avoid situations where their self-interests actually or even appear to conflict with the interests of RENFROE, our clients, and their customers. (Exhibit B to Plaintiffs’ Opposition to the Motion for Summary Judgment of E. A. Renfroe & Company)A fair reading of the Renfroe Code of Conduct does not, in my opinion, establish the duty the plaintiffs are relying on. The duty described in this document runs not to one interest, but to three: Renfroe, Renfroe’s clients (in this instance State Farm), and the clients’ customers (including, in this instance, the plaintiffs). Thus this duty is not, by definition, undivided, despite the use of that descriptive term in the code provision at issue. …
While the adjustor’s principal (in this case State Farm) owes the insured a duty of good faith and a duty of reasonable care, and may be vicariously liable for the acts of the adjustor, the legal relationship between the adjustor and the insured is more attenuated. An independent adjustor has a duty to investigate all relevant information and must make a realistic evaluation of a claim, but the adjustor is not liable to the insured for acts or omissions that amount to only simple negligence. The Renfroe Code of Conduct does nothing, in my opinion, to alter the legal duty of an adjustor to the insured under Mississippi law.
As to the claimed fraud/aiding and abetting, Judge Senter writes:
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. [Emph. mine.]
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.”
State Farm will never let this case go to trial. Lecky King would have to testify about firing engineers, paying flood policy limits before assessing the cause of damage, etc. Every bad faith move is in this file.
In Parloff’s article he mentioned 3 State Farm executives who have refused to testify under the Fifth Amendment. We all know about Lecky and her number 2; who is the third?
Researcher has anybody brought up the
Mississippi State Board of Registration
for Professional engineers and Land Surveyors?
Effective 6/30/2005 might be applicable!
16.01 Certificate of authority; use of terms
16.02 Use of words Engineer, Engineering, Surveyor, or Surveying.
17.0 Code of Professional Conduct
17.01 Responsibility to the Public
17.02 Competency for Assignments
17.03 Public Statements
17.04 Conflict of Interest
17.05 Solicitation of Work
17.06 Ethics
18.0 Disciplinary Actions
18.02 Investigative Procedures
waterwalking@3: I used the regulations you cite in a response to MSJ similar to McIntosh late last year, good point
Is it possible that they were paying flood policy limits with the approval of the NFIP? Is it possible the Mr. Ford failed to notice the flood damage? (Rigsby obviously saw the flood damage from her discoveries!). Would you pay an engineers invoice when he misses the obvious? This gets more interesting as time goes on, and I am so glad I don’t do work for SF.
Big time hat tip to Researcher for helping you out of towners understand the lay of the land.
Now I’d like to direct your attention to the quote in your own post Lotus.
“RENFROE expects employees to conduct the business of RENFROE in an ethical and legal manner, and to recognize that in all their transactions and at all times they have a duty of undivided loyalty to RENFROE, our clients, and their customers. These obligations demand positive action by all employees to protect those interests and to avoid situations where their self-interests actually or even appear to conflict with the interests of RENFROE, our clients, and their customers.”
Putting aside for a minute that it is impossible to serve three masters in Renfroe, State Farm and those who lost their houses if the Rigsby sisters weighed in on problems with how customer’s claims were adjusted on the side of the customer are they truly “document thieves” as they have been labeled here.
Also is Folo still in the habit of referring bar complaints on the basis of first names in incomplete transcripts?
The boys from Missouri called you out today in case you didn’t know. Rossmiller forget to tell you there was another meeting mentioned in the depositions until today, most likely when he saw the first filings hit PACER. DeWitt strikes me as the type to be nicer than you were to Patsy Brumfield.
Just saying – you and NMC botched Qui Tam badly. I hear through the grapevine we have more coming – this is getting good.
sop
Sop:
If you think I’ve botched the Qui Tam case badly, you aren’t reading Judge Senter’s ruling.
Anyone connected to SKG’s use of the Rigsby documents is disqualified. ANYONE. There is no way whatsoever that the folks in Kansas City can contend that they aren’t connected to Scruggs’s acquisition of the Rigsby documents. That’s how they were in on filing the suit when it was still under seal.
The Rigsby sisters are disqualified as witnesses in any case against State Farm. How is anyone going to do the qui tam case without the Rigsby sisters as witnesses– the whole theory of a qui tam case is that the Rigsbys have facts they know and no one else has that make out the government claims. That theory goes completely away if they can’t testify. So no one else in there right mind will pick up their case once they are disqualified.
As I tried to say in the post I made last week (Good bye Todd), it doesn’t matter if the Rigsbys or Graves were wrong about who was in the trailer– I’ll put it another way– it doesn’t matter WHO Todd is, or if Todd Graves was on the moon– the clear import of Judge Senter’s rulings is that anyone connected to Scruggs is out. Graves clearly is so connected.
So what did I get wrong?
Let me ask you a couple of questions that may lead you to another answer NMC. Is Qui Tam a policyholder lawsuit? What proof has been given that any of the now imfamous Rigsby documents were used in preparing the filing and that the KC lawyers saw or used them? Has there even been discovery in the case? Have the Rigsby sisters really been DQ’d “as witnesses in any case against State Farm.”?
My point is there are major differences between the False Claims Act case and policyholder lawsuits. I’ve read and re read the orders Judge Senter issued and it is making a big jump to equate the orders in policyholder cases to a very different critter in Qui Tam. We got a flavor of that in the first briefs submitted by Graves/DeWitt in response to the latest barrage of State Farm motions and memoranda.
I think the bottom line is just because State Farm said it in a brief doesn’t make the allegations against the Missouri lawyers true.
I see the stronger argument as the one being made disqualifiying the Rigsby sisters but again the facts as the related to the FCA filing differ from those in the policyholder suits. In FCA it is OK to take documents which help prove the case. That is not a substitute for discovery however, but then again there has been no discovery in Ex Rel Rigsby.
sop
Attorney misconduct is attorney misconduct, whether its in a policyholder lawsuit or a any other kind of lawsuit. Judge Senter’s order identifies the misconduct with clarity. Are you saying the Rigsbys and their documents are not relevant in the qui tam suit? I don’t think so. The particular claim the lawyer is bringing while misbehaving doesn’t matter. Judge Senter doesn’t say a word that suggests the particular claim being asserted drives (or even matters to) his decision, any more than the color of the shirt Scruggs was wearing when he took the document hand-off or signed checks to the Rigsbys would matter. Blue or white, Judge Senter has found it was misconduct.
Look at what Judge Senter has said–here is his original order. His decision is entirely driven by the misconduct he finds in Scruggs’s paying the Rigsbys for the documents and the association of other lawyers with Scruggs. That is exactly and inarguably parallel to the status of the KC lawyers in the qui tam case. Judge Senter does not even mention the notion that the suits he’s ruling on are policyholder suits!
In the 2nd disqualification order he said: “The Order [1173] entered in the instant case refers to and includes ‘other attorneys associated as counsel for the plaintiffs by these firms’ and ‘any other associated counsel.’ The Court intentionally used broad language because it was unclear to what extent other lawyers were involved in this and other litigation who might argue, for example, that they had never entered a formal appearance on behalf of plaintiffs and, thus, are eligible to represent one or more of them.”
and
“there is sufficient involvement in State Farm Katrina litigation cases to qualify Taylor-Martino as ‘other attorneys associated as counsel for the plaintiffs by these [disqualified]
firms.’”
I know you have expressed suspicions of the logic used by lawyers. But here the question is “what is the meaning of what the judge said?” You are trapped– that has to be answered with the logic lawyers use. While I expect the KC lawyers will try to come up with something to fight of disqualification, it’s going to be hard for them to do it and survive the laugh test. And I’d be surprised to find a lawyer outside the cases who sees it other than as I do.
What misconduct NMC? You make my point by assuming the unsubstantiated allegations made by State Farm in their filing is true. Did you read the Rigsby depositions? Did you see the part State Farm included in their filing to DQ the Missouri lawyers? There is an assumption being made that to this point not one shred of evidence has been presented to support.Your logic is suspect on the leap of faith you make assuming misconduct.
Judge Senter’s clarifying order speaks to an order on policyholder lawsuits and those associated with those suits and SKG and KLG. Dewitt and Graves were never affiliated with them. Qui Tam was signed by Chip Robertson. The non Missouri law firm was the Scruggs Law Firm not SKG. That is an important distinction.
Sop: I accept Judge Senter’s rulings as true and did not mention State Farm’s filings above. Surely you’ve noticed that Senter disqualified everyone in the vicinity of SKG for the $s paid to the Rigsbys, because they are fact witnesses. As I suggested, read judge Senter’s first order. He talks about Scruggs and zaps the other KG lawyers based on what Scruggs did. Inexorably this logic is going to zap the qui tam lawyers because they were associated with Scruggs.
Are you saying that the KC folks did not work with Scruggs?
I don’t see how the whistleblowers can be dq’ed from their own whistleblower suit. Whistleblowers take documents despite confidentiality agreements. That is what makes them whistleblowers. Whistleblowers have an economic incentive – they can receive a bounty for reporting fraud. These are issues that every whistleblower case has to sort out.
The State Farm motion tries to connect things that may not be connected. The sisters said they met with the qui tam lawyers in a trailer, probably in April ’06. The SF lawyers keep telling them it was on March 11 and then go down a list of Scruggs’ clients whose claims files were viewed on March 11.
Why would the qui tam lawyers care about SKG clients? The qui tam case is about defrauding the flood insurance program. The Scruggs client roster has nothing to do with the qui tam case.
It is very likely that the March 11 peek at Scruggs clients or whatever it was, did not involve the qui tam lawyers, and that the meeting with the qui tam lawyers was a separate meeting between attorneys and their clients.
Senter disqualified all the SKG lawyers, but I don’t think he killed the qui tam case.
A reader thinks this is a question too dumb to ask, so I’ll ask it by proxy: What would happen if another State Farm employee came forward at this point to present some of the evidence that the Rigsbys were privy to? It would be all-well-and-good, wouldn’t it? (But now for Merlin to find such a person . . . )
The Rigsby documents are not that special once it is known which cases have duplicate reports.
The second engineering report was sent to the homeowners to justify the wind claim, so it is in play. If the lawyers ask if there was a previous report, could State Farm withhold it simply because it was something the Rigsby’s once copied? Surely not.
The emails from the engineering firm were not Rigsby documents. They were obtained in discovery in the McIntosh case. The engineering firm tried to say that they should not have been included in discovery materials, but I think they backed off that claim in exchange for being dropped as defendants in the RICO case. Does that deal still hold?
NMC #11, why did it take Senter two years to DQ the lawyers and the Rigsbys?
May I add another wrinkle?
What if the slabs were already below base flood level and thus unable to participate in flood ins.?
http://www.djournal.com/pages/archive.asp?ID=192939&pub=1&div=News
He wasn’t asked at all until sometime last year, and ruled the first time (in September) that State Farm had waited too long. In Dec 07, State Farm moved again, adding in info about the bribery charges and fleshing out slightly the payments to the Rigsbys (although they were in both motions).
I don’t fully understand the change-of-heart for Judge Senter based on what he says in his rulings.
Here’s the AP story, including this graf:
A reference to DeWitt? Interesting that they haven’t heard about Merlin.
NMC, Judge Senter’s rulings dealt with SKG/KLG. He also mentioned in his ruling that he thought specific lawyers like Zach Butterworth conducted themselves ethically. Then again my comments were not about any of those lawyers.
Could you please point me to the part of Judge Senter’s ruling where he mentions the Missouri lawyers conducting themselves unethically?
Researcher you are hearing the same thing I am -that none of the Qui Tam Lawyers were present on 3-11-06.
In fairness and (I posted this over yonder) I too initially fell for that bit of State Farm PR propaganda myself but when I went back and re-read the depositions carefully it was clear they most likely were not there. Then Todd Graves publically placed his whereabouts at Disney on 3-11-06 and the rest fell into place.
There is a point where State Farm is going have to place some evidence besides their allegations, especially the one that questions the ethics of Tony DeWitt and company. I can’t imagine Judge Senter will be very happy with State Farm if their allegations against these lawyers turn out to be without merit.
I take the level of nasty in the Qui Tam litigation as a sign of what scares the daylights out of State Farm.
sop
Today in the Kansas City Star:
Also:
More there, but a cat’s trying to help me type . . .
Not trying to associate anyone with anyone, but who does this sound just like, A Cat’s Meow of Jim Hoods’ Whining.
Lotus 20 // Please check link.
Thanks for the heads-up, DN — fixed now. First try got one of those weird “no follow” thingies (?).
amicu @ 4,
You do have a copy and have read them?