Posted On: May 16, 2007, 5:25 pm CDT

Posted By: Zuniga

By company policy "minor impact"/"low damager" claims were not to be settled. Instead they were to be "fully litigated" and every effort was to be made to make it financially unfeasible for the insured to obtain any benefits regardless of whether liability was clear or not. The company policy was to "fully litigate" such claims by:


i. retaining "outside" counsel rather than attempt to resolve the claims;
ii. instructing outside counsel commence formal discovery;
iii. retaining biomechanical experts and accident reconstructionists on "low damager" cases;
iv. instructing outside counsel subpeona records instead of using authorizations to obtain
medical and employment records;
v. taking depositions of the claimant/insured, even after the insured had voluntarily given a recorded statement; and
vi. forcing the insured/claimant to undergo so-called IME's performed by doctors the company was confident would give reports unfavorable to the claimant/insured.

19. I was told of this policy when I was a bodily injury negotiator by Superintendent Elizabeth Haines in approximately 1993. Haines instructed me to immediately implement this policy and instructed others to do so as well in my presence. Ms. Haines instructed me to "broadcast" this unwillingness to settle and desire to litigate "low damager" claims to all plaintiffs attorneys offices I dealt with. Ms. Haines told me this policy was being implemented on a regionwide basis.

20. During this conversation and others Ms. Haines and Angelo Mazza (Divisional Claim Manager, now two levels above Mr. Arnold in the chain of command) communicated the "low damager" policy to me and others in my presence.

21. The stated goal and purpose of the "low damager" policy was to make it unprofitable, too expensive and costly, for plaintiff's attorneys to handle "low damager" cases, even those in which liability was clear. As explained to me, the results of the policy were intended to be a short-term increase in legal fees for the company but a significant long term decrease in benefits payments once the plaintiffs bar became aware that handling "low damager" cases would be too costly and unprofitable. From both personal experience and from what I have been told at State Farm, this policy was extremely effective. When I left the comply in in August of 1996 the "low damager" policy was still in effect.

THE HANDLING OF THE STOLIAR CLAIMS