Posted On: January 28, 2009, 8:25 pm CST

Posted By: help us settle claims with our

By Anita Lee, The Sun Herald, Biloxi, Miss.

Nov. 16--As instructed, State Farm catastrophe manager Alexis "Lecky" King refused to answer questions an Oklahoma attorney fired at her for one hour and 10 minutes.

Instead, she repeated the same phrase 87 times: "Because of the ongoing state and federal investigation, on advice of counsel, at this time, I must invoke my constitutional right to remain silent."

She would not tell the attorney why State Farm ordered a second damage report on property when the first showed a policyholder's losses were covered. Nor was she willing to discuss why State Farm went with that second report, finding little or no covered damage.

It happened after an Oklahoma tornado and, records show, on the Mississippi Coast after Hurricane Katrina.

"Do you believe as a team manager -- catastrophe team manager -- that you owe any of either the policyholders in Oklahoma who endured their catastrophe of May 1999 or the policyholders who suffered losses in Katrina any type of apology?" asked the Oklahoma policyholders' attorney, Jeff D. Marr.

Same answer.

"Can you tell myself and this jury what it will take, what the next jury in January, or any juries down in the Gulf Coast states need to do in order to ensure that State Farm stops this kind of behavior?" Marr asked.

State Farm's attorney objected to the question.

It didn't matter. King feared answers might incriminate her because she is the target of a state grand jury investigation in Mississippi regarding the insurance industry's claims practices after Katrina. She was even unwilling to say what route she took to reach the Nov. 3 meeting in Pensacola, Fla., where she lives.

The Oklahoma Supreme Court compelled King, along with State Farm executives from Bloomington, Ill., headquarters, to submit under oath to Marr's questions.

An Oklahoma jury in May found that State Farm "recklessly disregarded" its duty to deal fairly with policyholders, doing so "intentionally and with malice" through the use of biased expert opinions after the 1999 tornado. The tornado, one of many to strike May 3, 1999, reached a strength of F5, the most catastrophic on the Fujita scale.

As a result, the first of Marr's tornado clients collected $13 million in damages. Marr hopes to show State Farm's behavior continued in Mississippi. By doing so, he could secure higher damages for 70 more members of his class-action lawsuit in Oklahoma.





State Farm issued a statement Friday in response to Sun Herald questions about the legal activity: "The tornado that struck Oklahoma City in 1999 and Hurricane Katrina are two separate events," the company said. "We handle claims individually and pay what we owe based on the contract with the policyholder."

Marr is sharing information with Mississippi attorneys representing hundreds of State Farm policyholders whose homes Hurricane Katrina damaged or destroyed.

He also is sharing information with the Mississippi attorney general, who has convened the grand jury investigation, and with the U.S. Justice Department, which has launched a probe of its own.

In fact, Marr has announced to the world on his Web site, www.marrlawfirm.com., where to secure court records about State Farm.

State Farm attorneys have fought to keep employee testimony private in Oklahoma and Mississippi. In fact, at State Farm's request, an Oklahoma judge has forbade further discussion of the case by Marr and the other attorneys. State Farm is using court protections and procedures, the company said, available to all parties in a lawsuit.

As cases in both states grind forward, more information comes to light.

Executives for the nation's largest property and casualty insurer deny any intentional misconduct. They said the company worked with nationally recognized engineering firms to help determine what policyholders were owed in less than 2 percent of 84,000 Katrina claims in Mississippi.

In sworn testimony this summer in Oklahoma, company chairman and CEO Edward B. Rust Jr. said: "And that is ultimately my concern, also, is that we want to be fair with our customers. After all, the success of this organization is driven by our ability to retain current customers and to attract new customers. The last thing we want to do is be unfair with our customers."

Rust has not testified in Mississippi, but Lecky King did. Her testimony in a federal lawsuit filed in Gulfport is under wraps on orders from U.S. Magistrate Judge Robert H. Walker. Attorneys can't discuss what she did or did not say.

Two State Farm whistleblowers said, King and assistant Lisa Wachter were the only employees in the Coast office allowed to communicate with engineering firms the company used to help sort out what State Farm owed some policyholders after Katrina. Normally, the whistleblowers have said, State Farm adjusters communicated directly with engineering firms.

When a report blamed the covered peril of wind for damage, the whistleblowers said, King ordered another to show the culprit was water, covered by the federal flood insurance program. The company finally called a halt to the reports altogether, the whistleblowers said, because too many showed wind damage.

Joe Hollomon, once a federal prosecutor himself, said his clients, King and Wachter, had nothing to gain by denying claims and were here to help policyholders. In Oklahoma, King's testimony is a matter of public record, but the attorneys are not allowed to hand it out.

Hollomon told Marr before the questions started: "Obviously, we're, you know, that's a matter of concern to myself and my client. She's going to assert her constitutional privilege and, of course, the dissemination of that could obviously prejudice her if we one day find ourselves in front of a jury somewhere in Mississippi, so, you know, we're very concerned about that."





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State Farm engineering reports

Below are engineering reports recently filed as part of the Oklahoma lawsuit:

Larry Lowe residence, Oklahoma City

May 24, 1999: Strum Engineering, Oklahoma City, hired by State Farm, concluded high winds racked the roof, causing rafters to separate from the ridge, which could lead to leaks from rain and eventually create safety issues. Repairs recommended.

June 11, 1999: State Farm asked Haag Engineering to examine the house. Haag concluded in a report issued July 21: "It is our opinion that the Love (sic) residence was not structurally damaged by wind, and the frame requires no repairs."

Michael and Lisa Pole property, Oklahoma City

July 19, 1999: Strider Associates, hired by the Poles, found tornado damage to roof framing, decking and brick veneer, all requiring replacement.

July 27, 1999: A State Farm claims representative makes note of the Strider report and repairs recommended, then concluded, "I believe we should hire a structural engineer to inspect and provide us with their expert opinion."

Aug. 18, 1999: Inspecting for State Farm,Haag Engineering concluded, "The primary structural system of the Pole residence had not been damaged by wind." Wind damaged only a few roof shingles, the report says.

Terri Mullins property, Kiln, Miss.

Oct. 23, 2005: Forensic Analysis & Engineering Corp., hired by State Farm, concluded "the primary and predominant cause of damage to the subject property was due to hurricane force winds. This is based on the displacement of the house and the absence of water damage to the same."

Jan. 3, 2006: A second Forensic Analysis report says wind caused "tree failures," the cause of interior damage is undetermined and that "movement of the house across the street with "minimal obvious wind damage is consistent with a buoyant force applied to the building by rising water allowing the wind to blow the house northwards until it reached an obstruction." (State Farm interprets its policies to say wind damage is not covered when water contributes.)

Thomas and Pamela McIntosh property, Biloxi

Oct. 12, 2005: Forensic Analysis & Engineering Corp. concluded roof, door, carport and window damage was caused by wind, along with interior damage. The report State Farm ordered included a sticky note on the first page that said, "Put in Wind file -- DO NOT Pay Bill, DO NOT discuss."

Oct. 20, 2005: Forensic concluded wind damaged shingles, along with the second story floor and first floor ceilings, but said "damage to first floor walls and floors appears to be predominately caused by rising water."

State Farm issued the following statement Friday regarding its handling of policyholder claims. It reads, in part:

"The tornado that struck Oklahoma City in 1999 and Hurricane Katrina are two separate events. We handle claims individually and pay what we owe based on the contract with the policyholder.

"State Farm occasionally seeks the help of nationally recognized engineering firms to assist us in determining the cause of loss.





"Following last year's hurricanes, we sought assistance from these firms in less than 2 percent of the 84,000 claims filed in Mississippi. Katrina was an unprecedented event and in a small number of claims there was more than one engineering report due to multiple reasons.

"Our intent was to seek assistance to help us settle claims with our policyholders."
mr no one I WANT YOU TO KNOW I DO NOT GET MONEY FOR THIS..ITS JUST TIME TO WAKE UP.....