Inflated flood claim turns up at trial
Eye-Fans,
Mowbray, at it again, reports that the Weiss family of Slidell, who won the recent $2.8 million bad-faith verdict against Allstate, turned up paperwork during their trial showing the insurer took the Weiss’s contents claim of $38,848 and somehow managed to add $100,000 to it before submitting it to the National Flood Insurance Program.
Oops. That means, Allstate, which denied the Weiss’s wind claim, improperly, a federal New Orleans jury has found, was able to give the Weiss’s the maximum $100,000 available under their flood policy.
The “claim,” which the Weisses say they never saw, includes items the Weisses never owned, including “jewelry, furs, memorabilia, DVDs,” etc.
As Merryl Weiss said in a deposition:
” ‘I never even claimed that we had any of this stuff. I did not write this, and I did not write this,’ she said, pointing to items on the list”
They mostly made claims for some expensive fishing equipment made by Robert Weiss, a retired doctor.
No one at Allstate knows how the furs and jewels made their way onto the flood claim.
“Not Mike Wells, the outside adjuster employed by Allstate to handle the claim. He testified that he had given the Weisses’ handwritten list of fishing equipment to Allstate. Not Mung Hatter, who worked for four months processing Allstate claims before landing her current job at Beau Rivage casino on the Mississippi coast. Hatter testified that she simply put the finishing touches on the claim using the numbers the company gave her before supervisors signed off on the settlement and it was mailed to the flood program for payment.”
Then came testimony at the Weiss’s trial:
“On the fourth day of the trial at the federal courthouse on Camp Street, Paul Tracey, field operation’s manager for Allstate’s catastrophe unit, was asked point blank by Weiss attorney Richard Trahant how the contents figures grew.
‘Do you have any idea how those numbers increased from $38,000 to $139,000?’ Trahant asked.”
Good question; here’s the answer:
” ‘We . . . have quality control measures under our policy, under our process, to ensure that the evaluations are being done correctly and accurately. The federal government also reinspects our work for the National Flood Insurance Program,’ Tracey said.”
But as Mowbray points out:
…That didn’t explain the inflated and imaginative contents list.”
Allstate’s lawyer Judy Barrasso tries to help out her witness on cross, but it doesn’t go very well:
“To counter the implication that there was something underhanded going on with the list, Allstate lawyer Judy Barrasso asked Tracey what was to prevent Allstate from dumping costs onto the flood policy so as to spare Allstate the expense of a settlement under the homeowner policy.”
‘In handling these claims, what’s to stop Allstate from just putting all of somebody’s claim as a flood loss instead of a wind loss?’ Barrasso asked.
‘Well, number one, we don’t do that. . . . If there’s damages from wind, we pay it under the wind; if there’s damages from flood, we pay it under the flood,’ he responded.
That’s not comforting.
Apparently, the bogus list is traced to an unnamed “Alabama contract worker,” who cannot be located by Weiss’s lawyers or the Times-Picayune.
When in trouble, blame Alabama. Typical.
“In trial testimony, Hatter said the inflated contents list named an Alabama contract worker as adjuster. The contract worker could not be found for the trial and efforts by The Times-Picayune to contact her were unsuccessful. Hatter said that after getting the list from the contract worker, she typed up the claim and circulated it for approvals from higher-ups at Allstate before sending it to the flood program for payment.
Hatter testified that Allstate had programs in place to monitor what lower-level contract workers were doing with computerized claims. In his testimony, Tracey affirmed that everything Hatter would have done went up the ladder and was approved by someone at Allstate before it was submitted by the government.”
ITP asks: Is there anything lower than a lower-level contract worker, especially an Alabama one?
During a deposition, an Allstate lawyer tries to impeach Merryl Weiss by asking why did she cash the inflated flood contents check?
” ‘I knew it would all come out in the end one way or another. I mean, why would I call Allstate and say, “Wait, you gave me too much money here,” when I’m waiting on another . . . $600,000?’ Weiss said. ‘I assumed that in the end, all of this would be evened out. I never asked for more than I thought we should have.’ “
Ok. We have a wind claim denied in bad faith and in the face of Allstate’s own engineers’ testimony. Now we have $100,000 mysterious added to a government flood claim.
The U.S. attorney for the Eastern District of Louisiana is named Jim Letten. I am happy to report that he is a 20-year veteran of the Justice Department and is a former chief of the department’s once vaunted, now merged Organized Crime and Racketeering Strike Force. He was the lead prosecutor in the conviction of Edwin Edwards. He is also a retired Naval Reserve Intelligence Officer, having achieved the rank of commander.
Also, keep you eyes open for the coming Inspector General’s report from the Department of Homeland Security on the integrity of the National Flood program, administered by so-called Write Your Own carriers and overseen by Computer Sciences Corp.
Thanks as always to Ida, who today receives a field promotion to Assistant Deputy War Eagle First Class with Oak Leaf Clusters.
June 4th, 2007 at 9:05 am
[…] This, of course, follows the Mowbray blockbuster that showed Allstate charged up to 300% and higher for the same sheetrock and other materials while adjusting the same houses and how Allstate added $100,000 to a flood contents claim in the Weiss case, including jewelry, furs, etc. that the Weiss family itself had never heard of or filed for. […]