SHAME on IJ for printing a “puff piece” provided by the law firm handling this class action suit against State Farm.
Here is the bio of their source for this “news”:
“Stephen M. Garcia… has served as lead counsel on behald of disenfranchised consumers in cases including, insurance bad faith, medical malpractice, elder abuse and products liability. Mr. Garcia served as counsel in class actions brought on behalf of consumers against such major diverse corporations as Allstate Insurance Company, Tenet Healthcare, Pennzoil, Medtronics, (et al)” —www.lawgarcia.com/profiles.asp
So say it was more than tens of thousands and lets say 100,000 affected policyholders. 100,000 x $63 = $6.3 million. Watch them settle for something like $1.5 million legal fees for Garcia Law Firm, $4 million for the settlement to be distributed via $40 discount vouchers applicable to the affected policyholders’ next renewal policy.
It’s coal for the insurance company, dirt for the victims, and diamonds for the attorneys.
Both the comments miss the point of this article altogether. State Farm is unjustly enriching itself at the detriment of the insured. That is breaking RULE #1 of insurance. Unless you are a shareholder in state farm, stop drinking the cool aide. Even if you are a shareholder, admit they are wrong and recognize when corporations are doing something wrong they must be corrected.
Since our administrative branch of the government either refuses to or is incapable of policing corporations, it must by default fall to the courts. Sorry, I’m sure this upsets you.
Don’t worry, they will find another way to make money….
Ethel Adams is an innocent victim who was hit and critically injured when Michael Testa tried to run his girlfriend off the road on Aurora Avenue North in March. Now her insurance company has denied her coverage. She can stand only with a walker and must be taken care of by her daughter, Vicki Adams, seen in the background.
THOMAS JAMES HURST / THE SEATTLE TIMES
Ethel Adams was driving the crumpled car in the foreground.
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Archive | Domestic dispute ends in 6-vehicle pile-up on Aurora
Archive | Suspect in car crash has criminal history
Ethel Adams was driving along minding her own business last March when a pickup truck was forced into her lane, slamming into her head-on.
She had to be cut from her crumpled Hyundai Accent. She was in a coma for nine days. Doctors first debated whether she’d live, then, later, whether she’d walk. It would seem Adams was the unlucky victim of an unforeseen event — what most anyone would call an “accident.”
Not her insurance company.
Though Adams, 60, has $2 million worth of coverage, a subsidiary of Farmers Insurance has decided not to pay her a penny because they say someone caused Adams’ crash on purpose.
And state case law suggests they might be able to get away with it.
“I’m in shock; it’s unbelievable to me that a huge insurance company can just declare that I wasn’t in an accident,” said Adams, sitting in a wheelchair in her Everett apartment.
Nobody disputes the gist of what happened to Adams last March. She was driving south at 193rd and Aurora Avenue North, delivering dentures and crowns for her job at Edgewood Dental Laboratory.
A crazed man named Michael R. Testa was driving north attempting to run his girlfriend off the road. In an infamous road-rage crash that has been shown countless times on TV, he bashed her pickup truck across the centerline and into the southbound lanes.
Four other cars crashed. The pickup truck slammed directly into Ethel Adams, squashing her car and knocking it backward into another truck.
No one died. Adams, with collapsed lungs and 17 broken bones, was the most seriously hurt. She spent a month in the hospital and another five in a nursing home.
Earlier this week, Testa pleaded guilty to two crimes — domestic-violence assault for hitting his girlfriend, and vehicular assault for causing the pileup. Testa, 40, will be sentenced Nov. 10 and is expected to get up to 12 years.
And that’s where it gets maddening for Ethel Adams. She doesn’t know Testa or his girlfriend. From her vantage, a truck driven by a stranger came hurtling out of nowhere and ruined her life.
She says if anyone ever deserved the label “innocent victim,” she is it.
But a Farmers’ affiliate, Truck Insurance Exchange, argues that Adams’ state of mind is irrelevant. Even though it was Adams’ insurance policy, the uninsured-motorist portion is designed to cover Testa’s liability. Therefore it’s Testa’s state of mind that matters, and Testa meant to cause the wreck, so it’s not an accident.
Explains a letter from Farmers’ Seattle-based attorney, Ronald Dinning: “The common meaning of ‘accident’ does not depend on the perspective of the injured insured, but instead essentially depends on the intent of the person causing the injury or damage.”
He cited a 1990 Pierce County case in which a woman purposely crashed into a car driven by her ex-husband. The state Supreme Court ruled then that insurance didn’t have to cover the ex-husband’s injuries in part because the outcome wasn’t “unexpected or unforeseen” — that is, it wasn’t an accident.
“It’s also not unexpected or unforeseen that if you are ramming a car from behind with the intent of pushing it into oncoming traffic, you’re going to hit some people,” Dinning said in an interview. “That’s what Testa did. Liability insurance is only for accidents, and this wasn’t an accident.”
The logic here is impressively tortured, even for an industry known for exploiting technical loopholes.
To argue that Testa, who went on a rampage and then was sent to a psychiatric hospital for delusions, could have possibly intended to crash a car into Adams, a woman he didn’t know existed, is truly an outrage.
“That sounds like more of a crime than what happened to me [in the wreck],” Adams said.
Police interviewed Testa twice the day of the crash. His statements were wildly erratic. Testa initially told police his girlfriend’s Ford truck rammed his truck from behind. Later he confessed he “hit her in the *** end of the Ford and flipped it.” But he never says his goal was to push her truck into oncoming lanes. He never mentions other cars at all.
Dinning said what happened to Adams is “very unfortunate,” but “the law is the law unless the Legislature wants to change it.”
That’s exactly what lawmakers ought to do. They did something similar in 1998 when they banned insurance companies from punishing the victim in cases of domestic violence. That came after Safeco Insurance said it wouldn’t cover the expenses of a Kent woman when her estranged husband burned down her house.
Of course a new law would be too late to help Ethel Adams. She was an innocent bystander to the crime but is suffering most of the pain. And she’s the one left to twist in the wind.
(The state of Washington has paid her medical bills so far through workers’ compensation — more than $500,000, according to her attorney, Karen Koehler. But the state is covering only a portion of her lost salary and other expenses.)
What ought to happen next is Farmers should miraculously discover some inner decency — or maybe just some shame — and pay Adams her due. That’s what Safeco did in 1998, eventually paying to rebuild that torched house even though it wasn’t required to.
Then Adams could at least rent a wheelchair-accessible home to replace her cramped apartment, says her daughter, Vicki Adams, 34.
An apology for this fiasco also wouldn’t hurt.
More likely, the companies will have to be sued. Koehler says a suit could be filed as early as today.
Ethel Adams, who can barely reach her kitchen using a walker, is dumbfounded someone could claim she wasn’t in a car accident. But mostly she feels betrayed.
“The insurance companies say they’re here to protect people. But then when you need them most, they do something like this
“State Farm is unjustly enriching itself at the detriment of the insured.”
According to the IJ’s source i.e. the attorney bringing suit…. of course the attorney suing them is going to provide information in support of his case.
Now perhaps the IJ DID contact State Farm (doesn’t mention that they did), and State Farm may have replied with the standard “We do not comment on ongoing litigation” therefore giving up their opportunity to include their side of this story.
I don’t think they should be improperly profiting from the policyholders, and I am not familiar with the “make whole” rule in CA.
But, if his policy clearly stated his obligation was 20% of the rental fees, then why shouldn’t the $70 collected by State Farm in this example be considered as a partial subrogation against the at-fault party’s carrier?
TO THE UNTOUCHABLES. Edward B. Rust, Jr., will be happy to tell you that he is the Chief Executive Officer of State Farm Mutual Insurance Company. He has deep family ties to State Farm, as his father and grand father have both served in that capacity. He will also tell you that he is an educated man who has been to law school and is a past practicing attorney. In addition, he was the chairman of the Coalition for Excellence in Education and a member of George W. Bush’s transition advisory team on education. So with all of that education why will he not deal with his company’s inbred greed. Does he not know that we are in the 21st century where anyone can look on the internet and see the billions of dollars that are being spent to protect their empire from the consumer? In Utah, the company was fine $25 million in punitive damages, in part for the “systematic destruction of documents and systematic manipulation of individual claim files to conceal claim mishandling”. An Idaho appeals court fined the company $9.5 million in punitive damages for making use of “a completely bogus” outside bill review company that helped lower the cost of medical bills. In October of 1999, an Illinois jury rendered a $456 million judgment against State Farm and an additional $730 million in punitive damages for the insurer’s breach of contract with auto policy holders by relying on generic replacement parts. Rust was adamant in his insistence that fraud had not been committed. A class action law suit in the name of State Farm policy holders was filed in 2003 for breach of contract and statutory consumer fraud in which $1.1 billion was awarded to plaintiffs. When a company is misleading the public, should that not be considered fraud? A consumer would go to prison for that type of behavior. State Farm will let you know that, in several states, fraud and abuse is pushing up the cost of auto insurance. A court in late 2001 reached an unfriendly consumer decision that could have the effect of reaching deep into the pockets of the consumer. Sharply higher jury awards in vehicular liability cases are putting additional upward pressure on auto insurance rates. The average jury award in auto liability cases rose from $187,000 to $269,000 in 2000, an increase of 44%. I question if any of the lawsuits would be necessary if the company would just fairly pay their claims. The company represents on their web-site that consumer protection is one of their most important goals, but do they really think that courts would be awarding multiple millions of dollars in bad faith claims if that were their emphasis? State Farm’s ratings are based on their financial strength. State Farm states that their high ratings are also based on strong claims paying ability. With this ability, why is it necessary for their policy holders to allege that the claims department was directed, in evaluating their cases, to take them to trial instead of settling within the limits of the policy? This practice exposed policyholders to judgments above the limits of their policies, when the company was attempting to make an effort to win smaller decisions. Two former in-house attorneys for State Farm contend that they were often called upon by the insurer to represent its’ policy holders and were forced to commit “unlawful and unethical activities, including requiring the two to stay silent about the rights of the policyholders”. State Farm seems to have reckless indifference for the truth for the purpose of corporate and personal economic gain. State Farm should know that continued scrutiny of their claims paying practices will continue especially with the advent of new claims that are surfacing from lawsuits revolving around Hurricane Katrina. A message to Mr. Rust, and any employee of the company that is acting in bad faith for its policy holders. Its time to stop no more
State Farm has history of not releasing records
By Anita Lee
McClatchy Newspapers
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BILOXI, Miss. (MCT) — In some cases, State Farm’s top leadership prefers not to share or even keep records that offer insight into how policyholder claims are handled, according to court records.
Chairman and CEO Edward B. Rust Jr. said in sworn testimony earlier this month that no minutes are kept of quarterly meetings held by the company’s top management, the Chairman’s Council, and that policyholders have no right to information about an investigation State Farm Insurance Cos. has ordered of its relationship with Haag Engineering Co.
State Farm spokesman Phil Supple said the company doesn’t “intend to-;try this-;case in the media.”
“State Farm stands by testimony given by President and Vice Chairman Vince Trosino, who said when asked about these allegations, ‘It’s not part of our system. It’s not part of our core values. It’s not what made us the most successful property and casualty insurer, life insurer, in the country.'”
Juries in two states, Texas and Oklahoma, have found Haag provided biased reports to State Farm to minimize or deny policyholder claims. Mississippi’s attorney general currently is conducting a grand jury investigation to determine whether State Farm and other insurers denied Hurricane Katrina claims through the use of fraudulent engineering reports.
Haag denies bias, but State Farm suspended business with the company in June and ordered an independent investigation after an Oklahoma jury awarded a total of $13 million to a policyholder over tornado damages. Subsequent trials are set to determine damages for 70 other policyholders, all of whom had claims investigated by Haag.
In past court cases, judges have chastised and even fined State Farm for withholding records the company was ordered to produce. Evidence the company destroyed documents has been presented in several cases.
In the Oklahoma case, after State Farm finally turned over to the court a “claims legal research” DVD and other records, Judge Richard G. Van Dyck told company attorneys
“As I was watching these tapes I just want to say this for the record, the hair on the back of my neck did — did stand up because I was seeing things there that early on in this case I was told by (State Farm) defense counsel didn’t exist and couldn’t be produced. So I’m not real happy with that and I want to remind all counsel that their ethical responsibilities as attorneys outweigh the wishes of their clients.”
Gary T. Fye, an expert in the analysis of disputed insurance claims who lives in Nevada, often testifies in insurance cases. Fye, who said he has testified on behalf of policyholders and insurance companies, has provided the courts information on State Farm’s history of destroying and withholding records.
In 1998, Fye wrote in a Florida case
“I have been witnessing document destruction, concealment, and obstruction of discovery by State Farm for many years in connection with my review of internal claim practices documents of the insurer. I have accumulated certain Exhibits which show the company’s goals and objectives for document handling by its employees. The documents show close to 28 years of intentional destruction, concealment and distortion of claim practices records.”
In some cases, company executives did not keep records.
Jeff Marr, the attorney suing State Farm in Oklahoma, took sworn testimony Sept. 6 from Rust. Topics included Rust’s Chairman’s Council, made up of top State Farm executives. The group, which includes the company’s general counsel, meets quarterly.
Marr was fishing for records of those meetings that he could subpoena for his lawsuit.
“Certainly,” Marr asked Rust, “you keep records of the quarterly meetings where the entire Chairman’s Council is present?”
“We have an agenda,” Rust said, “but minutes in that, no.”
“Why not?” Marr asked.
Rust replied, “Never felt a need to.”
Marr later asked, “Are there any written agendas that are available should I choose to request them in the lawsuit?”
“I’m not sure what might be available,” Rust said.
Rust also said policyholders, who essentially own the private mutual company, are not entitled to know what the Chairman’s Council discusses or decides about litigation against State Farm, citing attorney-client privilege.
Marr questioned why the company would withhold information from policyholders, who own State Farm.
“Well, again,” said Rust (who has a law degree), “I’m not an expert in the area, but I think as you find — even if I’m a shareholder in a publicly traded company, there are things that are not — you know, I do not have access to.”
Marr later asked if policyholders have a right to see documents from State Farm’s investigation of Haag.
“No,” Rust said.
“Why not?” Marr asked. “Is it privileged?”
Rust said, “I believe so.”
(c) 2006, The Sun Herald (Biloxi, Miss.).
Distributed by McClatchy-Tribune Information Services.
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St. Farm is a mutual insurance company. As such, there are no shareholders, the company is owned by its policyholders. So in effect, the gentlemen is attempting to raise rates for himself because he didn’t get $70.
In my state its been this way for as long as I can remember. Dont people realize the more they pay out, the more they charge the client. The more protections you beg for, the more freedoms we loose. The more the government takes over well just look at social security. Its the whiners who ruin it for us all.
Well, there really isn’t enough info here to make an informed judgement on that case. Why only $70 went to SF? Was that all the rental he was entitled to due to limited damage to the car that only needed two days to be fixed? If that was the case, why did SF pay so much? If the guy’s rental car expense was out of line SF should not have paid that much. If they approved it, the $63 money should go back to the insured because SF enabled him to (or caused him to) rack up excessive rental charges for one reason or another.
Perhaps it was comparative negligence which would have then meant that he should have gotten some of that money back (just like as if it were his deductible). Either way, SF should have paid him some if not all of the recovered funds.
But it really boils down to the lawyers will get paid and little will happen to the benefit of SF customers. God Bless America!
If subro resulted in only a $70 recovery, then the moron who has nothing better to do with his time than file a frivolous lawsuit for $70 should receive a pro-rata reimbursement of 20% per his contractual allocation. SF should send him $14.00 and non-renew him.
I don’t work in California, but my understanding was that subro recoveries in that state were pro rata, thats its not a made whole state. Anyone know for sure? If it is a pro rata state, then SF did the right thing in its reimbursement.
I really feel for this person-you know, any of us could be involved in a claim like this and be severely injured like this woman. Even though she is being reimburesed through WC, Farmers is taking it on the chin for looking like a bunch of jerks. The dumb thing here is that market principles won’t apply here-its not like Farmers is screwing its own policy holder-its messing with a 3rd party so the consumer can’t talk with their feet. This is where laws have to come into play that keep us on the straight and narrow.
Seen this type of case before. At trial the insured’s attorney may need only prove that the crazed man did not intend to injure the victim, but rather his girlfriend. While the collision with the girlfriend was intentional, he did not intend to injure the other party. That could be all the daylight they need for a jury to run through. If it goes to trial, Farmers will lose and get hit with bad faith & punative damages. Remember, a jury is going to want for the victim to win, how can you not? All the plaintiff lawyer needs to do is give them an excuse to find in her favor.
I was rear ended on President’s Day by a S.F. insured. While the claims rep was not quick and it was disappointing the general lack of communication, they did everything else on the claim just as I would have hoped.
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Subject: RE: RE: ShameState Farm seems to have reckless indifference
Posted On: May 16, 2008, 12:55 am CDT
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Comment:
State Farm has history of not releasing records
By Anita Lee
McClatchy Newspapers
Advertisement
BILOXI, Miss. (MCT) — In some cases, State Farm’s top leadership prefers not to share or even keep records that offer insight into how policyholder claims are handled, according to court records.
Chairman and CEO Edward B. Rust Jr. said in sworn testimony earlier this month that no minutes are kept of quarterly meetings held by the company’s top management, the Chairman’s Council, and that policyholders have no right to information about an investigation State Farm Insurance Cos. has ordered of its relationship with Haag Engineering Co.
State Farm spokesman Phil Supple said the company doesn’t “intend to-;try this-;case in the media.”
“State Farm stands by testimony given by President and Vice Chairman Vince Trosino, who said when asked about these allegations, ‘It’s not part of our system. It’s not part of our core values. It’s not what made us the most successful property and casualty insurer, life insurer, in the country.'”
Juries in two states, Texas and Oklahoma, have found Haag provided biased reports to State Farm to minimize or deny policyholder claims. Mississippi’s attorney general currently is conducting a grand jury investigation to determine whether State Farm and other insurers denied Hurricane Katrina claims through the use of fraudulent engineering reports.
Haag denies bias, but State Farm suspended business with the company in June and ordered an independent investigation after an Oklahoma jury awarded a total of $13 million to a policyholder over tornado damages. Subsequent trials are set to determine damages for 70 other policyholders, all of whom had claims investigated by Haag.
In past court cases, judges have chastised and even fined State Farm for withholding records the company was ordered to produce. Evidence the company destroyed documents has been presented in several cases.
In the Oklahoma case, after State Farm finally turned over to the court a “claims legal research” DVD and other records, Judge Richard G. Van Dyck told company attorneys
“As I was watching these tapes I just want to say this for the record, the hair on the back of my neck did — did stand up because I was seeing things there that early on in this case I was told by (State Farm) defense counsel didn’t exist and couldn’t be produced. So I’m not real happy with that and I want to remind all counsel that their ethical responsibilities as attorneys outweigh the wishes of their clients.”
Gary T. Fye, an expert in the analysis of disputed insurance claims who lives in Nevada, often testifies in insurance cases. Fye, who said he has testified on behalf of policyholders and insurance companies, has provided the courts information on State Farm’s history of destroying and withholding records.
In 1998, Fye wrote in a Florida case
“I have been witnessing document destruction, concealment, and obstruction of discovery by State Farm for many years in connection with my review of internal claim practices documents of the insurer. I have accumulated certain Exhibits which show the company’s goals and objectives for document handling by its employees. The documents show close to 28 years of intentional destruction, concealment and distortion of claim practices records.”
In some cases, company executives did not keep records.
Jeff Marr, the attorney suing State Farm in Oklahoma, took sworn testimony Sept. 6 from Rust. Topics included Rust’s Chairman’s Council, made up of top State Farm executives. The group, which includes the company’s general counsel, meets quarterly.
Marr was fishing for records of those meetings that he could subpoena for his lawsuit.
“Certainly,” Marr asked Rust, “you keep records of the quarterly meetings where the entire Chairman’s Council is present?”
“We have an agenda,” Rust said, “but minutes in that, no.”
“Why not?” Marr asked.
Rust replied, “Never felt a need to.”
Marr later asked, “Are there any written agendas that are available should I choose to request them in the lawsuit?”
“I’m not sure what might be available,” Rust said.
Rust also said policyholders, who essentially own the private mutual company, are not entitled to know what the Chairman’s Council discusses or decides about litigation against State Farm, citing attorney-client privilege.
Marr questioned why the company would withhold information from policyholders, who own State Farm.
“Well, again,” said Rust (who has a law degree), “I’m not an expert in the area, but I think as you find — even if I’m a shareholder in a publicly traded company, there are things that are not — you know, I do not have access to.”
Marr later asked if policyholders have a right to see documents from State Farm’s investigation of Haag.
“No,” Rust said.
“Why not?” Marr asked. “Is it privileged?”
Rust said, “I believe so.”
(c) 2006, The Sun Herald (Biloxi, Miss.).
Distributed by McClatchy-Tribune Information Services.
E-mail this story | Print this story | Search archives | RSS
I have been witnessing document destruction, concealment, and obstruction of discovery by State Farm for many years in connection with my review of internal claim practices documents of the insurer. I have accumulated certain Exhibits which show the company’s goals and objectives for document handling by its employees. The documents show close to 28 years of intentional destruction, concealment and distortion of claim practices records
You all know there is a “Stuart Chandler,” in Fresno area in CA, he’s a Personal Injury attorney…and if this is him, I’d look to investigate him, beyond means.
i’ve received 2 letters about this lawsuit and i sent back the proper information; but, i haven’t heard anything back yet about any money that is owed to me.
I believe Chandler. I live on the East coast. We just experienced a terrible hurricane. State Farm agents have been playing mind games with me for four weeks now. I have paid consistently for over 7 years, one minute they say they are going to cover my loss, and then then they say no. Get the word out. They suck!!!!!!!!
State Farm is also sleeping with the collision companies that they partner with (calling them “preferred auto shops”. These shops are using re-manufactured materials on brand new cars, not telling you that they’re using remanufactured materials, and thus taking the savings and pocketing them, while the insureds have no say in the repair process. Moreover, how can you be issued a State Farm payment for your repair to a private shop from a collision center that is operating out of a name that has no connection to State Farm? I’d like to know this. They tell you that you have the right to use a shop of your own choosing, but treat you like a second class citizen when you don’t. This is “fraud” and they should all be taken to federal prison.
SHAME on IJ for printing a “puff piece” provided by the law firm handling this class action suit against State Farm.
Here is the bio of their source for this “news”:
“Stephen M. Garcia… has served as lead counsel on behald of disenfranchised consumers in cases including, insurance bad faith, medical malpractice, elder abuse and products liability. Mr. Garcia served as counsel in class actions brought on behalf of consumers against such major diverse corporations as Allstate Insurance Company, Tenet Healthcare, Pennzoil, Medtronics, (et al)” —www.lawgarcia.com/profiles.asp
SHAME ON INSURANCE JOURNAL
So say it was more than tens of thousands and lets say 100,000 affected policyholders. 100,000 x $63 = $6.3 million. Watch them settle for something like $1.5 million legal fees for Garcia Law Firm, $4 million for the settlement to be distributed via $40 discount vouchers applicable to the affected policyholders’ next renewal policy.
It’s coal for the insurance company, dirt for the victims, and diamonds for the attorneys.
Both the comments miss the point of this article altogether. State Farm is unjustly enriching itself at the detriment of the insured. That is breaking RULE #1 of insurance. Unless you are a shareholder in state farm, stop drinking the cool aide. Even if you are a shareholder, admit they are wrong and recognize when corporations are doing something wrong they must be corrected.
Since our administrative branch of the government either refuses to or is incapable of policing corporations, it must by default fall to the courts. Sorry, I’m sure this upsets you.
Don’t worry, they will find another way to make money….
victim’s insurer should have a heart
By Danny Westneat
Seattle Times staff columnist
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STEVE RINGMAN / THE SEATTLE TIMES
Ethel Adams is an innocent victim who was hit and critically injured when Michael Testa tried to run his girlfriend off the road on Aurora Avenue North in March. Now her insurance company has denied her coverage. She can stand only with a walker and must be taken care of by her daughter, Vicki Adams, seen in the background.
THOMAS JAMES HURST / THE SEATTLE TIMES
Ethel Adams was driving the crumpled car in the foreground.
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Archive | Domestic dispute ends in 6-vehicle pile-up on Aurora
Archive | Suspect in car crash has criminal history
Ethel Adams was driving along minding her own business last March when a pickup truck was forced into her lane, slamming into her head-on.
She had to be cut from her crumpled Hyundai Accent. She was in a coma for nine days. Doctors first debated whether she’d live, then, later, whether she’d walk. It would seem Adams was the unlucky victim of an unforeseen event — what most anyone would call an “accident.”
Not her insurance company.
Though Adams, 60, has $2 million worth of coverage, a subsidiary of Farmers Insurance has decided not to pay her a penny because they say someone caused Adams’ crash on purpose.
And state case law suggests they might be able to get away with it.
“I’m in shock; it’s unbelievable to me that a huge insurance company can just declare that I wasn’t in an accident,” said Adams, sitting in a wheelchair in her Everett apartment.
Nobody disputes the gist of what happened to Adams last March. She was driving south at 193rd and Aurora Avenue North, delivering dentures and crowns for her job at Edgewood Dental Laboratory.
A crazed man named Michael R. Testa was driving north attempting to run his girlfriend off the road. In an infamous road-rage crash that has been shown countless times on TV, he bashed her pickup truck across the centerline and into the southbound lanes.
Four other cars crashed. The pickup truck slammed directly into Ethel Adams, squashing her car and knocking it backward into another truck.
No one died. Adams, with collapsed lungs and 17 broken bones, was the most seriously hurt. She spent a month in the hospital and another five in a nursing home.
Earlier this week, Testa pleaded guilty to two crimes — domestic-violence assault for hitting his girlfriend, and vehicular assault for causing the pileup. Testa, 40, will be sentenced Nov. 10 and is expected to get up to 12 years.
And that’s where it gets maddening for Ethel Adams. She doesn’t know Testa or his girlfriend. From her vantage, a truck driven by a stranger came hurtling out of nowhere and ruined her life.
She says if anyone ever deserved the label “innocent victim,” she is it.
But a Farmers’ affiliate, Truck Insurance Exchange, argues that Adams’ state of mind is irrelevant. Even though it was Adams’ insurance policy, the uninsured-motorist portion is designed to cover Testa’s liability. Therefore it’s Testa’s state of mind that matters, and Testa meant to cause the wreck, so it’s not an accident.
Explains a letter from Farmers’ Seattle-based attorney, Ronald Dinning: “The common meaning of ‘accident’ does not depend on the perspective of the injured insured, but instead essentially depends on the intent of the person causing the injury or damage.”
He cited a 1990 Pierce County case in which a woman purposely crashed into a car driven by her ex-husband. The state Supreme Court ruled then that insurance didn’t have to cover the ex-husband’s injuries in part because the outcome wasn’t “unexpected or unforeseen” — that is, it wasn’t an accident.
“It’s also not unexpected or unforeseen that if you are ramming a car from behind with the intent of pushing it into oncoming traffic, you’re going to hit some people,” Dinning said in an interview. “That’s what Testa did. Liability insurance is only for accidents, and this wasn’t an accident.”
The logic here is impressively tortured, even for an industry known for exploiting technical loopholes.
To argue that Testa, who went on a rampage and then was sent to a psychiatric hospital for delusions, could have possibly intended to crash a car into Adams, a woman he didn’t know existed, is truly an outrage.
“That sounds like more of a crime than what happened to me [in the wreck],” Adams said.
Police interviewed Testa twice the day of the crash. His statements were wildly erratic. Testa initially told police his girlfriend’s Ford truck rammed his truck from behind. Later he confessed he “hit her in the *** end of the Ford and flipped it.” But he never says his goal was to push her truck into oncoming lanes. He never mentions other cars at all.
Dinning said what happened to Adams is “very unfortunate,” but “the law is the law unless the Legislature wants to change it.”
That’s exactly what lawmakers ought to do. They did something similar in 1998 when they banned insurance companies from punishing the victim in cases of domestic violence. That came after Safeco Insurance said it wouldn’t cover the expenses of a Kent woman when her estranged husband burned down her house.
Of course a new law would be too late to help Ethel Adams. She was an innocent bystander to the crime but is suffering most of the pain. And she’s the one left to twist in the wind.
(The state of Washington has paid her medical bills so far through workers’ compensation — more than $500,000, according to her attorney, Karen Koehler. But the state is covering only a portion of her lost salary and other expenses.)
What ought to happen next is Farmers should miraculously discover some inner decency — or maybe just some shame — and pay Adams her due. That’s what Safeco did in 1998, eventually paying to rebuild that torched house even though it wasn’t required to.
Then Adams could at least rent a wheelchair-accessible home to replace her cramped apartment, says her daughter, Vicki Adams, 34.
An apology for this fiasco also wouldn’t hurt.
More likely, the companies will have to be sued. Koehler says a suit could be filed as early as today.
Ethel Adams, who can barely reach her kitchen using a walker, is dumbfounded someone could claim she wasn’t in a car accident. But mostly she feels betrayed.
“The insurance companies say they’re here to protect people. But then when you need them most, they do something like this
“State Farm is unjustly enriching itself at the detriment of the insured.”
According to the IJ’s source i.e. the attorney bringing suit…. of course the attorney suing them is going to provide information in support of his case.
Now perhaps the IJ DID contact State Farm (doesn’t mention that they did), and State Farm may have replied with the standard “We do not comment on ongoing litigation” therefore giving up their opportunity to include their side of this story.
I don’t think they should be improperly profiting from the policyholders, and I am not familiar with the “make whole” rule in CA.
But, if his policy clearly stated his obligation was 20% of the rental fees, then why shouldn’t the $70 collected by State Farm in this example be considered as a partial subrogation against the at-fault party’s carrier?
TO THE UNTOUCHABLES. Edward B. Rust, Jr., will be happy to tell you that he is the Chief Executive Officer of State Farm Mutual Insurance Company. He has deep family ties to State Farm, as his father and grand father have both served in that capacity. He will also tell you that he is an educated man who has been to law school and is a past practicing attorney. In addition, he was the chairman of the Coalition for Excellence in Education and a member of George W. Bush’s transition advisory team on education. So with all of that education why will he not deal with his company’s inbred greed. Does he not know that we are in the 21st century where anyone can look on the internet and see the billions of dollars that are being spent to protect their empire from the consumer? In Utah, the company was fine $25 million in punitive damages, in part for the “systematic destruction of documents and systematic manipulation of individual claim files to conceal claim mishandling”. An Idaho appeals court fined the company $9.5 million in punitive damages for making use of “a completely bogus” outside bill review company that helped lower the cost of medical bills. In October of 1999, an Illinois jury rendered a $456 million judgment against State Farm and an additional $730 million in punitive damages for the insurer’s breach of contract with auto policy holders by relying on generic replacement parts. Rust was adamant in his insistence that fraud had not been committed. A class action law suit in the name of State Farm policy holders was filed in 2003 for breach of contract and statutory consumer fraud in which $1.1 billion was awarded to plaintiffs. When a company is misleading the public, should that not be considered fraud? A consumer would go to prison for that type of behavior. State Farm will let you know that, in several states, fraud and abuse is pushing up the cost of auto insurance. A court in late 2001 reached an unfriendly consumer decision that could have the effect of reaching deep into the pockets of the consumer. Sharply higher jury awards in vehicular liability cases are putting additional upward pressure on auto insurance rates. The average jury award in auto liability cases rose from $187,000 to $269,000 in 2000, an increase of 44%. I question if any of the lawsuits would be necessary if the company would just fairly pay their claims. The company represents on their web-site that consumer protection is one of their most important goals, but do they really think that courts would be awarding multiple millions of dollars in bad faith claims if that were their emphasis? State Farm’s ratings are based on their financial strength. State Farm states that their high ratings are also based on strong claims paying ability. With this ability, why is it necessary for their policy holders to allege that the claims department was directed, in evaluating their cases, to take them to trial instead of settling within the limits of the policy? This practice exposed policyholders to judgments above the limits of their policies, when the company was attempting to make an effort to win smaller decisions. Two former in-house attorneys for State Farm contend that they were often called upon by the insurer to represent its’ policy holders and were forced to commit “unlawful and unethical activities, including requiring the two to stay silent about the rights of the policyholders”. State Farm seems to have reckless indifference for the truth for the purpose of corporate and personal economic gain. State Farm should know that continued scrutiny of their claims paying practices will continue especially with the advent of new claims that are surfacing from lawsuits revolving around Hurricane Katrina. A message to Mr. Rust, and any employee of the company that is acting in bad faith for its policy holders. Its time to stop no more
State Farm has history of not releasing records
By Anita Lee
McClatchy Newspapers
Advertisement
BILOXI, Miss. (MCT) — In some cases, State Farm’s top leadership prefers not to share or even keep records that offer insight into how policyholder claims are handled, according to court records.
Chairman and CEO Edward B. Rust Jr. said in sworn testimony earlier this month that no minutes are kept of quarterly meetings held by the company’s top management, the Chairman’s Council, and that policyholders have no right to information about an investigation State Farm Insurance Cos. has ordered of its relationship with Haag Engineering Co.
State Farm spokesman Phil Supple said the company doesn’t “intend to-;try this-;case in the media.”
“State Farm stands by testimony given by President and Vice Chairman Vince Trosino, who said when asked about these allegations, ‘It’s not part of our system. It’s not part of our core values. It’s not what made us the most successful property and casualty insurer, life insurer, in the country.'”
Juries in two states, Texas and Oklahoma, have found Haag provided biased reports to State Farm to minimize or deny policyholder claims. Mississippi’s attorney general currently is conducting a grand jury investigation to determine whether State Farm and other insurers denied Hurricane Katrina claims through the use of fraudulent engineering reports.
Haag denies bias, but State Farm suspended business with the company in June and ordered an independent investigation after an Oklahoma jury awarded a total of $13 million to a policyholder over tornado damages. Subsequent trials are set to determine damages for 70 other policyholders, all of whom had claims investigated by Haag.
In past court cases, judges have chastised and even fined State Farm for withholding records the company was ordered to produce. Evidence the company destroyed documents has been presented in several cases.
In the Oklahoma case, after State Farm finally turned over to the court a “claims legal research” DVD and other records, Judge Richard G. Van Dyck told company attorneys
“As I was watching these tapes I just want to say this for the record, the hair on the back of my neck did — did stand up because I was seeing things there that early on in this case I was told by (State Farm) defense counsel didn’t exist and couldn’t be produced. So I’m not real happy with that and I want to remind all counsel that their ethical responsibilities as attorneys outweigh the wishes of their clients.”
Gary T. Fye, an expert in the analysis of disputed insurance claims who lives in Nevada, often testifies in insurance cases. Fye, who said he has testified on behalf of policyholders and insurance companies, has provided the courts information on State Farm’s history of destroying and withholding records.
In 1998, Fye wrote in a Florida case
“I have been witnessing document destruction, concealment, and obstruction of discovery by State Farm for many years in connection with my review of internal claim practices documents of the insurer. I have accumulated certain Exhibits which show the company’s goals and objectives for document handling by its employees. The documents show close to 28 years of intentional destruction, concealment and distortion of claim practices records.”
In some cases, company executives did not keep records.
Jeff Marr, the attorney suing State Farm in Oklahoma, took sworn testimony Sept. 6 from Rust. Topics included Rust’s Chairman’s Council, made up of top State Farm executives. The group, which includes the company’s general counsel, meets quarterly.
Marr was fishing for records of those meetings that he could subpoena for his lawsuit.
“Certainly,” Marr asked Rust, “you keep records of the quarterly meetings where the entire Chairman’s Council is present?”
“We have an agenda,” Rust said, “but minutes in that, no.”
“Why not?” Marr asked.
Rust replied, “Never felt a need to.”
Marr later asked, “Are there any written agendas that are available should I choose to request them in the lawsuit?”
“I’m not sure what might be available,” Rust said.
Rust also said policyholders, who essentially own the private mutual company, are not entitled to know what the Chairman’s Council discusses or decides about litigation against State Farm, citing attorney-client privilege.
Marr questioned why the company would withhold information from policyholders, who own State Farm.
“Well, again,” said Rust (who has a law degree), “I’m not an expert in the area, but I think as you find — even if I’m a shareholder in a publicly traded company, there are things that are not — you know, I do not have access to.”
Marr later asked if policyholders have a right to see documents from State Farm’s investigation of Haag.
“No,” Rust said.
“Why not?” Marr asked. “Is it privileged?”
Rust said, “I believe so.”
(c) 2006, The Sun Herald (Biloxi, Miss.).
Distributed by McClatchy-Tribune Information Services.
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Mr. Herder,
St. Farm is a mutual insurance company. As such, there are no shareholders, the company is owned by its policyholders. So in effect, the gentlemen is attempting to raise rates for himself because he didn’t get $70.
If State Farm Insurance Adjusters have Denied Or Prolong Your Claim Or Dropped You Please Sign The Petition Against State Farm…
http://www.gopetition.com/petitions/statefarmautoaccidentnotmyfault.html
http://statefarmbadfaithnotatfault.blogspot.com/
In my state its been this way for as long as I can remember. Dont people realize the more they pay out, the more they charge the client. The more protections you beg for, the more freedoms we loose. The more the government takes over well just look at social security. Its the whiners who ruin it for us all.
The insured bought an 80/20 rental coverage and got what he paid for.
“Its the whiners who ruin it for us all.”
So, next time State Farm doesn’t pay out the full amount on your policy, you’ll just grin and bear it?
Why should this person not get what State Farm owes him by law?
Why should State Farm profit by breaking a law. You make no sense. At all.
I’m a State Farm agent, & I think if we did something wrong we need to correct it. We need to follow the law like everyone else.
Well, there really isn’t enough info here to make an informed judgement on that case. Why only $70 went to SF? Was that all the rental he was entitled to due to limited damage to the car that only needed two days to be fixed? If that was the case, why did SF pay so much? If the guy’s rental car expense was out of line SF should not have paid that much. If they approved it, the $63 money should go back to the insured because SF enabled him to (or caused him to) rack up excessive rental charges for one reason or another.
Perhaps it was comparative negligence which would have then meant that he should have gotten some of that money back (just like as if it were his deductible). Either way, SF should have paid him some if not all of the recovered funds.
But it really boils down to the lawyers will get paid and little will happen to the benefit of SF customers. God Bless America!
If subro resulted in only a $70 recovery, then the moron who has nothing better to do with his time than file a frivolous lawsuit for $70 should receive a pro-rata reimbursement of 20% per his contractual allocation. SF should send him $14.00 and non-renew him.
I don’t work in California, but my understanding was that subro recoveries in that state were pro rata, thats its not a made whole state. Anyone know for sure? If it is a pro rata state, then SF did the right thing in its reimbursement.
I really feel for this person-you know, any of us could be involved in a claim like this and be severely injured like this woman. Even though she is being reimburesed through WC, Farmers is taking it on the chin for looking like a bunch of jerks. The dumb thing here is that market principles won’t apply here-its not like Farmers is screwing its own policy holder-its messing with a 3rd party so the consumer can’t talk with their feet. This is where laws have to come into play that keep us on the straight and narrow.
Seen this type of case before. At trial the insured’s attorney may need only prove that the crazed man did not intend to injure the victim, but rather his girlfriend. While the collision with the girlfriend was intentional, he did not intend to injure the other party. That could be all the daylight they need for a jury to run through. If it goes to trial, Farmers will lose and get hit with bad faith & punative damages. Remember, a jury is going to want for the victim to win, how can you not? All the plaintiff lawyer needs to do is give them an excuse to find in her favor.
I was rear ended on President’s Day by a S.F. insured. While the claims rep was not quick and it was disappointing the general lack of communication, they did everything else on the claim just as I would have hoped.
http://www.merchantcircle.com/business/Arizona.Auto.Insurance.480-659-0229
is not responsible for the content of the message below.
Subject: RE: RE: ShameState Farm seems to have reckless indifference
Posted On: May 16, 2008, 12:55 am CDT
Posted By:
Comment:
State Farm has history of not releasing records
By Anita Lee
McClatchy Newspapers
Advertisement
BILOXI, Miss. (MCT) — In some cases, State Farm’s top leadership prefers not to share or even keep records that offer insight into how policyholder claims are handled, according to court records.
Chairman and CEO Edward B. Rust Jr. said in sworn testimony earlier this month that no minutes are kept of quarterly meetings held by the company’s top management, the Chairman’s Council, and that policyholders have no right to information about an investigation State Farm Insurance Cos. has ordered of its relationship with Haag Engineering Co.
State Farm spokesman Phil Supple said the company doesn’t “intend to-;try this-;case in the media.”
“State Farm stands by testimony given by President and Vice Chairman Vince Trosino, who said when asked about these allegations, ‘It’s not part of our system. It’s not part of our core values. It’s not what made us the most successful property and casualty insurer, life insurer, in the country.'”
Juries in two states, Texas and Oklahoma, have found Haag provided biased reports to State Farm to minimize or deny policyholder claims. Mississippi’s attorney general currently is conducting a grand jury investigation to determine whether State Farm and other insurers denied Hurricane Katrina claims through the use of fraudulent engineering reports.
Haag denies bias, but State Farm suspended business with the company in June and ordered an independent investigation after an Oklahoma jury awarded a total of $13 million to a policyholder over tornado damages. Subsequent trials are set to determine damages for 70 other policyholders, all of whom had claims investigated by Haag.
In past court cases, judges have chastised and even fined State Farm for withholding records the company was ordered to produce. Evidence the company destroyed documents has been presented in several cases.
In the Oklahoma case, after State Farm finally turned over to the court a “claims legal research” DVD and other records, Judge Richard G. Van Dyck told company attorneys
“As I was watching these tapes I just want to say this for the record, the hair on the back of my neck did — did stand up because I was seeing things there that early on in this case I was told by (State Farm) defense counsel didn’t exist and couldn’t be produced. So I’m not real happy with that and I want to remind all counsel that their ethical responsibilities as attorneys outweigh the wishes of their clients.”
Gary T. Fye, an expert in the analysis of disputed insurance claims who lives in Nevada, often testifies in insurance cases. Fye, who said he has testified on behalf of policyholders and insurance companies, has provided the courts information on State Farm’s history of destroying and withholding records.
In 1998, Fye wrote in a Florida case
“I have been witnessing document destruction, concealment, and obstruction of discovery by State Farm for many years in connection with my review of internal claim practices documents of the insurer. I have accumulated certain Exhibits which show the company’s goals and objectives for document handling by its employees. The documents show close to 28 years of intentional destruction, concealment and distortion of claim practices records.”
In some cases, company executives did not keep records.
Jeff Marr, the attorney suing State Farm in Oklahoma, took sworn testimony Sept. 6 from Rust. Topics included Rust’s Chairman’s Council, made up of top State Farm executives. The group, which includes the company’s general counsel, meets quarterly.
Marr was fishing for records of those meetings that he could subpoena for his lawsuit.
“Certainly,” Marr asked Rust, “you keep records of the quarterly meetings where the entire Chairman’s Council is present?”
“We have an agenda,” Rust said, “but minutes in that, no.”
“Why not?” Marr asked.
Rust replied, “Never felt a need to.”
Marr later asked, “Are there any written agendas that are available should I choose to request them in the lawsuit?”
“I’m not sure what might be available,” Rust said.
Rust also said policyholders, who essentially own the private mutual company, are not entitled to know what the Chairman’s Council discusses or decides about litigation against State Farm, citing attorney-client privilege.
Marr questioned why the company would withhold information from policyholders, who own State Farm.
“Well, again,” said Rust (who has a law degree), “I’m not an expert in the area, but I think as you find — even if I’m a shareholder in a publicly traded company, there are things that are not — you know, I do not have access to.”
Marr later asked if policyholders have a right to see documents from State Farm’s investigation of Haag.
“No,” Rust said.
“Why not?” Marr asked. “Is it privileged?”
Rust said, “I believe so.”
(c) 2006, The Sun Herald (Biloxi, Miss.).
Distributed by McClatchy-Tribune Information Services.
E-mail this story | Print this story | Search archives | RSS
I have been witnessing document destruction, concealment, and obstruction of discovery by State Farm for many years in connection with my review of internal claim practices documents of the insurer. I have accumulated certain Exhibits which show the company’s goals and objectives for document handling by its employees. The documents show close to 28 years of intentional destruction, concealment and distortion of claim practices records
You all know there is a “Stuart Chandler,” in Fresno area in CA, he’s a Personal Injury attorney…and if this is him, I’d look to investigate him, beyond means.
Agrred Matt, this firm is a bunch of pigs.
i’ve received 2 letters about this lawsuit and i sent back the proper information; but, i haven’t heard anything back yet about any money that is owed to me.
I believe Chandler. I live on the East coast. We just experienced a terrible hurricane. State Farm agents have been playing mind games with me for four weeks now. I have paid consistently for over 7 years, one minute they say they are going to cover my loss, and then then they say no. Get the word out. They suck!!!!!!!!
Why dont we start a class action against state farm. they get attourneys to protect them but we pay the rates every month.
State Farm is also sleeping with the collision companies that they partner with (calling them “preferred auto shops”. These shops are using re-manufactured materials on brand new cars, not telling you that they’re using remanufactured materials, and thus taking the savings and pocketing them, while the insureds have no say in the repair process. Moreover, how can you be issued a State Farm payment for your repair to a private shop from a collision center that is operating out of a name that has no connection to State Farm? I’d like to know this. They tell you that you have the right to use a shop of your own choosing, but treat you like a second class citizen when you don’t. This is “fraud” and they should all be taken to federal prison.