SOURCE: American Lawyer Media, LLC. [Get a temp password here for sites below]
State Farm wrote to the California Supreme Court on Feb. 16, urging the justices to again consider depublishing a damaging Second District ruling. In 1997, State Farm convinced a court to re-seal a former employee's sworn statements accusing the company of routinely defrauding its policyholders. The declarations.
SOURCE: American Lawyer Media, LLC. [Get a temp password here for sites below]
The Ninth Circuit affirmed a private right of action under California's Earthquake Insurance Act, reinstating bad faith claims against State Farm Fire & Casualty Co. The opinion.
September 27, 1998 Suit Contests Insurers' Insistence on Generic Car Parts [WITH COMMENTARY by WCH] and Supreme Court Follow Up By MATTHEW L. WALD WASHINGTON -- When Mark Covington drives his 1992 Chevy Cavalier at night, the beam of the left headlight wobbles across the road, and in daylight, the red paint on the hood shows an odd ridge on the left side. He blames his insurance company: After his wife crashed the car into the back of a pickup in April, he said, he took the car to one of the best body shops in Laurel, Miss., but the shop had to use generic parts. "State Farm just absolutely refused to put GM parts on it," Covington said. Instead, the insurance company insisted on "imitation parts." "They said that by using those, it would restore our vehicle to the original condition and value, which it did not do," Covington said. Lawyers are seeking to add him to a large class-action suit against State Farm. But the suit has alarmed consumer advocates, including Public Citizen, which Ralph Nader founded as part of his auto-safety crusades, and the attorneys general of New York, Massachusetts, Pennsylvania and Nevada, along with the National Association of State Insurance Commissioners. They have all filed briefs at the Supreme Court supporting State Farm and opposing people like Covington. [PUBLIC CITIZEN? - I WONDER WHO BOUGHT THEM OFF? NAIC IS FUNDED BY THE INSURANCE INDUSTRY! - DUH! STATE INSURANCE COMMISSIONERS ARE ALMOST ALL BOUGHT BY THE INSURANCE INDUSTRY. ONE CAN ONLY GUESS ABOUT ATTORNEYS GENERAL.] The court could announce as early as Monday whether it will hear arguments in the case. Plaintiffs say the case involves 5 million drivers and could cost State Farm $2 billion, but their opponents say it would drive up insurance rates nationwide. [WHICH EXACTLY WHAT INSURANCE COMPANIES ALWAYS SAY - SURE WE WOULDN'T WANT THESE *VERY* RICH BABIES ACTUALLY TO PAY A CLAIM NOW - IT JUST MIGHT DRIVE UP INSURANCE RATES. A LITTLE REALITY: How do insurance rates get "driven up"? With consent of the State regulatory agencies which are already in consort with the insurance companies, and are as stated, agencies of the State government. Even if given individuals have not been bribed, to assent to this robbery, the interesting twist is that the State governments get to tax the insurance companies and by increasing the profit of insurance companies a State government increases its own revenue. State governments have decided that it is good for you to have insurance and so - you must by law. The State has a weapon at your head and you are forced to pay. Your paying is indirect proportion to the revenue the State receives as an indirect tax on you, in addition to federal income tax, state income tax, sales taxes imposed by this and that level of government. Insurance rates may raise only because it is profitable to your State government, which revenue it seems cannot be used to support the court systems by which you are supposed to be able to gain redress of grievance against the the insurance companies by which you have benn defrauded. IT IS IN THE INTEREST OF SELF SERVING GOVERNMENTAL MONSTERS TO SEE TO IT THAT YOU ARE TAXED AND DEFRAUDED TO DEATH - GREED BLINDS THESE BUREACRATIC MINDS TO THE ULTIMATE CONSEQUENCE WHICH IS THE DEATH AND DESTRUCTION OF THEIR CASH COWS. IT IS FAR SOUNDER, ECONOMICALLY, TO ALLOW FRAUDULENCE TO BE PUNISHED. AT LEAST THIS STATISTICALLY INSURES THE VIABLITY OF CASH COWS. "Bulls make money; Bears make money; Pigs loose money." - Stock Market Advice from John Baiardi. We haven't got government with the common intelligence of a goldfish. ] Lawyers who filed the class-action suit quote a study done for General Motors that says that cars repaired with generic parts lose $1,670 in resale value, and that some generic parts can be dangerous. Insurance companies dispute both ideas. [INSURANCE COMPANIES DISPUTE THAT A MAN WITH NO HEART BEAT IS DIASABLED - SO DO THEIR MEDICAL WHORES.] Both sides agree that if the class-action suit succeeds, it will affect nearly all drivers around the country. It could also overturn insurance regulations or state laws in New York, Massachusetts and Hawaii, among other places. [SOME LAWS NEED OVERTURNING.] According to consumer advocates and the insurance companies, what State Farm calls "quality replacement parts," and others call "after-market parts" meet the same standards for fit and finish, corrosion resistance, strength and durability as the ones produced by GM, Ford or Toyota. The after-market parts have broken a longstanding monopoly of the auto companies on replacement fenders, hoods, bumpers and other parts, consumer advocates say. [IF ANY WANTS THEM, LET THEM BUY THEM - NO PROBLEM.] The insurance companies say they have a good reason for demanding generic replacements. "They are one of the factors that contributes to our being able to keep our premiums as low as we can," said David Hurst, a spokesman for State Farm. When an insured driver has an accident, everyone is better off if replacement parts cost less, he said. [AND AGAIN: WHICH EXACTLY WHAT INSURANCE COMPANIES ALWAYS SAY - SURE WE WOULDN'T WANT THESE *VERY* RICH BABIES ACTUALLY TO PAY A CLAIM NOW - IT JUST MIGHT DRIVE UP INSURANCE RATES.] And manufacturers' parts are expensive. The Alliance of American Insurers calculated that building a 1996 Chevy Lumina from GM parts would cost $72,600, more than triple the sticker price of the car. GM, on the other hand, has advertised that generic parts are not as durable and can cause safety problems. [BUT, WE'RE NOT BUILDING A WHOLE CAR, ARE WE? ALLIANCE OF AMERICAN INSURERS? - JUST A LARGER COLLECTION OF LIARS. ON INFORMATION AND BELIEF, I'LL BELIEVE GM, THANK YOU.] The dispute is one of the longest-running in the car business. "I've never seen two industries more dependent on each other that hate each other more," said Jack Gillis, chief spokesman at the Consumer Federation of America, referring to insurers and collision-repair companies. "There's no respect, no trust, no nothing." [WHY, ON EARTH, SHOULD ANYONE HAVE TRUST IN OR RESPECT FOR AN INSURANCE COMPANY? - UNLESS THERE IS A DAMN GOOD REASON.] Part of the animosity, he said, comes from repair shops' billing insurance companies for original manufacturer parts and then using the cheaper generic ones, a practice that most consumers could not discern. The body shops sometimes do this to spare car owners the cost of their deductibles, or sometimes they do it so they can pocket the difference. [CAN YOU SPELL D-I-V-E-R-S-I-O-N ?] Gillis, who is also the author of an annual buying guide called The Car Book, is not completely neutral; he is also the executive director of a nonprofit organization established by the insurance industry, the Certified Auto Parts Association, to evaluate generic parts. ["Certified Auto Parts Association"!? - FUNDED BY WHO?! GIVE ME A BREAK!] Gillis said parts that carried his organization's seal were just as good as parts from GM and other manufacturers, a contention that will be an issue in the class-action trial. But he added that only about 3 percent of the parts used in collision repairs were certified by his group. Five percent, he said, come from junkyards, 12 percent are noncertified generic parts, and 80 percent come from auto manufacturers. [GILLIS WILL SAY ANYTHING HE'S TOLD TO SAY.] The class-action lawyers, who brought suit in Marion, Ill., in July 1997, say the use of generic parts constitutes fraud under Illinois law. "They breach their contract every time they put these flimsy, imitation parts on a vehicle," said Don Barrett, one of the class-action lawyers, in Lexington, Miss. [FRAUD? - BY AN INSURANCE COMPANY? - THIS IS NEWS?] But many consumer advocates disagree. "All things being equal, the generic product is going to be cheaper," said Brian Wolfman, a lawyer at Public Citizen, which filed a brief in the case. "I'm not suggesting all things are always equal, but sometimes they are equal. You ought not create barriers to introduction of these generic products." [WHOSE CREATING BARRIERS? HOW ABOUT BEING ALLOWED TO HAVE WHAT YOU WANT? CAR OF YOUR CHOICE - PARTS OF YOUR CHOICE - PHYSICIAN OF YOUR CHOICE - IT SEEMS WE HAVE ALL THIS FREEDOM AND LOOSING ALL OF OUR CHOICES. GOVERNMENT PUTS A GUN TO OUR HEADS TO FORCE PURCHASE OF INSURANCE AND THEN AIDS AND ABBETS THE FRAUD, EXTORTION AND RACKETERRING COMMITTED BY INSURANCE COMPANIES. PRAY TELL THEN, JUST WHAT IS FREEDOM?] Such products are not only cheaper than the ones made by car companies, but the competition helps drive down the cost of car-company parts, too, consumer advocates say. [OH NOT ALL CONSUMER ADVOCATES SAY THAT - AND OF COURSE, THEY ARE CHEAPER, NOT LESS EXPENSIVE, CHEAPER - WHICH IS EXACTLY WHAT ALL CONSUMERS ARE SUPPOSED ACCEPT AND PUT UP WITH, EVEN IF IT KILLS THEM - IT'S THE LAW!] The insurance commissioners and attorneys general see another issue, which State Farm asked the Supreme Court to review: Should a court in Illinois be allowed to make what amounts to a national rule on insurance? (The class includes drivers in all states but Arkansas and Tennessee, where separate class-action suits have been filed.) [CHIKEN KAKA - CAN YOU SPELL D-I-V-E-R-S-I-O-N ?] Insurance regulations in New York encourage the use of generic parts when equal-quality parts are available; a law in Massachusetts requires their use. Hawaii, according to documents in the case, permits the use of manufacturers' parts only if the car owner pays the difference. [BUT, OF COURSE: INSURANCE COMPANIES HAVE BOUGHT THE STATE LEGISLATURES - WHAT DO YOU THINK THEY DOO WITH ALL THAT MONEY THEY TAKE FROM YOU? PAY CLAIMS?] Opponents of generic parts cite safety. In an incident that the class-action lawyers intend to introduce in the trial, which is scheduled to begin next April unless the Supreme Court intervenes, Daniel Della Rova was driving his 1988 Honda Accord on a four-lane state highway near Reading, Pa., to his job as an electronics engineer at Lucent Technologies on Jan. 2. He pulled into the left lane to pass a truck, when his hood slammed into his windshield. The hood blocked the view to the front completely, he said, leaving him to navigate by sticking his head out the window. Della Rova had bought the Honda used. The car's original owner, Della Rova said, explained that when the Accord was new, he had accidentally backed into it with his other vehicle, a truck, puncturing the hood. The first owner repaired the car with a generic part. An auto body expert, Charles Barone, who heard about the accident and later retrieved the Honda from a junkyard, said that on the after-market hood, the "striker," the piece of metal that descends and hooks into the latch on the car, was spot-welded inadequately. One weld showed signs of rust, he said. On Honda hoods, he said, the striker is a sturdy metal shaft that passes through several small holes and is then smashed into a mushroom shape, so it cannot come loose. Barone, a former body shop owner whom the class-action lawyers expect to call as a witness, said, "We all know what junk these parts are. They are approximations at best." [YES - BUT THEY CAN PAY 100,000 BODY SHOP PEOPLE TO SAY OTHERWISE - DING! - YOU LOSE - BUT THANK YOU FOR PLAYING ANYHOW.] Many insurance companies specify generic parts. At Allstate, the second-largest auto insurer, Raleigh Floyd, a spokesman, said his company recommended them but would pay for original manufacturer parts if the policy holder wanted. [ALLSTATE !!!!????? - THE JOKE OF THE YEAR. CF. You're In Bad Hands With Allstate] "The whole reason for going into generic parts is it reduces cost, but it also comes down to peace of mind," he said. Cars can be restored to what the industry calls "pre-loss condition" with generic parts, he said, but in the car owner's mind, "that may mean the part came out of a Toyota plant." [UH HUH - SURE - RIGHT - AND I'M ALEXANDER THE GREAT.] Followup: Insurance News Network - State Farm denied by U.S. Supreme Court _________________________________________________________________ Based on an article, Copyright 1998 The New York Times Company _________________________________________________________________ Subject: State Farm's Secret $100 million dollar deal I'm sure some of you have seen this, but I've also found the news doesn't always get around, thanks to court sealing, Vacatur, and a very spotty media. Although we normally cover Allstate, this is a very good example of how huge decisions are hidden by court sealing, so that most of the public continues to think insurers are like kindly old uncles. And of course, Allstate does the same sort of hiding. Jim & Paula ========================================= Thursday, June 11, 1998 State Farm Pays $100 Million to Settle Quake Suit Insurance: Secret agreement involved 117 policyholders alleging that coverage was unfairly lowered before Northridge temblor. Firm denies wrongdoing. By KENNETH REICH, SOLOMON MOORE, JEFF LEEDS, Times Staff Writers State Farm Insurance Co. secretly has paid $100 million to 117 policyholders to settle a lawsuit alleging that the company unfairly cut their earthquake coverage before the devastating 1994 Northridge temblor. The settlement, hammered out before a retired state Supreme Court justice working as a private mediator and filed under a seal of "deepest confidentiality," marks the largest known single payout by an insurer involved in post-earthquake claims. Lawyers for the homeowners said the case could also expose State Farm, the nation's richest insurance company, to claims by thousands of other policyholders whose insurance was covertly pared years before the Northridge quake. In a September 1984 internal memo obtained by The Times, State Farm executives considered sending their policyholders a written clarification of their earthquake coverage. But the executives, Rob Kelley, John Rosenstock and J.P. De Cicco, decided against the idea, saying that it would "appear inconsistent with our marketing philosophy since we don't want to sell the coverage." The company did restructure the policies available to customers, however. It replaced two insurance plans with a less costly "combined limit policy" and eliminated the notion of "guaranteed replacement," the idea that it would pay to replace homes destroyed by an earthquake even if the cost exceeded a homeowner's coverage limit. "There were a lot more people that were victims of State Farm's marketing ploy," said George Kehrer, founder of the nonprofit homeowners group that advised most of the plaintiffs. Nonetheless, Kehrer said he felt "a great sense of relief and satisfaction that a wrong had been made right." Northridge resident Irene Allegro and 116 other homeowners alleged that State Farm secretly restructured their policies in 1985 to limit the amount of money they could recover if their homes were damaged in an earthquake. The homeowners said State Farm concealed the true nature of the changes by sending notices that described the coverage as "new" or "different," without disclosing that it also amounted to less. State Farm had been under pressure to settle the case since May 1997, when a Superior Court judge found that the company had "failed to give specific notice in 'clear and understandable language,' " as required under state law. The company appealed that ruling, but settled before the appellate court could decide the case. Lawyers for Allegro and the other homeowners said that about 25,000 other policyholders were similarly misled and could sue the company based on the Superior Court's ruling. State Farm officials declined to discuss the potential for future litigation, but noted that the company admitted no wrongdoing in the settlement. "Ultimately, settlement, although a bitter pill, is the best way to go," said company spokesman Bill Sirola. "There are business considerations that must be weighed." Lawyers for the plaintiffs and other advocates, however, said the case could pave the way for numerous lawsuits by other property owners, who purchased insurance before 1985. "The fact that State Farm paid a $100-million settlement to more than 100 people indicates that there was massive fraud and wrongdoing and that there are many other policyholders entitled to money as well," said Harvey Rosenfield, founder of the Santa Monica-based Proposition 103 Enforcement Project. But even if other homeowners file new lawsuits, experts said, they would have to navigate particularly murky territory in insurance law, and prove that they had not missed a one-year statute of limitations that insurance companies believe has been established by California court decisions. While insurance companies like State Farm make it their business to assess risk, the unpredictability of earthquakes has been a source of anxiety in the industry for more than a decade. Companies Sought to Limit Liability Before 1984, insurance companies tried to limit their potential liability in disaster-prone states like California by capping sales of certain policies. Under a state law that became effective that year, however, insurance companies were required to offer earthquake coverage to people who had homeowners' insurance. "They didn't perceive that earthquake insurance would be a profitable enough line of business," said Keith Crocker, who holds a teaching chair at the University of Michigan. "Once they were required to offer earthquake insurance, they may well indeed have tried to figure out how to reduce their exposure to a risk that they never wanted to take in the first place." Policyholder Jerry Yandell, 58, didn't know about the change in his coverage until it was too late. He had insured eight rental properties and his Chatsworth townhouse before 1985, and hoped to retire on the rental income before the Northridge quake shook his dream to the ground. State Farm eventually offered a settlement equal to his coverage limit, $641,000, although the damage to all his properties was estimated at more than $1 million. "We went to our agent and I said: 'I know the damage is more than [our policy limit], but I have guaranteed replacement,' " Yandell said. "The agent looked at me and told me: 'No, you don't.' I could have just fallen off my chair." Yandell said he filed his claim just before the one-year time limit expired, and was unsure whether others who tried to file now would be successful even if they are armed with a Superior Court decision. State Farm officials said they believe that had the Allegro case continued to the appellate level, they would have prevailed. Michael J. Bidart, the plaintiffs' lawyer, disagreed. "We thought our odds were good," he said. "That's what makes cases settle." * SECRECY ISSUES: Columnist Kenneth Reich questions secret settlement. B5 Copyright Los Angeles Times BUSINESS NEWS Homeowners said State Farm sent them notices that described different coverage, without disclosing that it amounted to less coverage. The Associated Press L O S A N G E L E S, June 11 State Farm Insurance Co. said today it settled claims of more than 100 policyholders who accused the company of trimming coverage about a decade before the 1994 Northridge earthquake. The Bloomington, Ill.-based insurer would not confirm a newspaper report that the policyholders received $100 million to drop their lawsuit, or divulge other details of the agreement reached last November. "The settlement amount is confidential, as agreed to by all parties, but represents a small part of the more than $3 billion paid by State Farm to more than 117,000 policyholders whose property was damaged," a company statement said. The settlement is the largest known single payout by an insurer involved in post-earthquake claims, the Los Angeles Times reported. According to an internal company memo in September 1984, executives considered informing policyholders about restructuring plans but decided against it because it would "appear inconsistent with our marketing philosophy." Company Used Muddled Terms The lawsuit said two insurance plans were ultimately replaced by a less expensive policy, and the company eliminated the notion of "guaranteed replacement," which would require the insurer to replace homes destroyed by a quake even if the cost surpassed a policyholder's coverage limit. Instead, State Farm sent policyholders notices that described the coverage as "new" or different" without disclosing that it amounted to less coverage, according to the lawsuit filed by 117 homeowners. In May 1997, a Superior Court judge ruled that the company failed to give notice in "clear and understandable language,"' as required under state law. State Farm's appeal of the ruling was pending when the settlement was reached. "Ultimately, settlement, although a bitter pill, is the best way to go," said Bill Sirola, a company spokesman. The magnitude 6.7 earthquake in Northridge, in Los Angeles' San Fernando Valley, killed 72, injured thousands and caused more than $40 billion in damage and economic losses. Copyright 1998 Associated Press. -- Come To "You're In Bad Hands With Allstate" (and others) at http://www.insurancejustice.com/ and find out why you're NOT insured. ------------------------------------------------------------------- Subject: Re: Amicus Anapolis Well I'm gratified to see that DESPITE the amicus briefs of the AG's that the Supreme Court has decided to let the Justice system run it's course as our forefathers desired. When you said the AG of Massachusetts submitted a brief, were you referring to Scott Harshbarger who is named in my lawsuit for collusion and dereliction of duties for not investigating UNUM. I recieved another "blow-off" from his office yesterday (the Regulated Industried Division), claiming that since I had filed a lawsuit, their office did not have to DO anything. Since when do CRIMINALS get off the hook just because a CIVIL lawsuit is filed? Judydoc Paula Moran wrote: > > On Oct 5, the Supreme Court refused to decertify a nationwide class > action against State Farm, for their forcing auto repairers to use fake > parts. Of interest is not the suit itself, but the "friends" of State > Farm who filed Amicus briefs in support of this poor little > multi-billion dollar company, which, according to our studies, is nearly > as bad as Allstate when it comes to cheating citizens. > > Amicus breifs in support of State Farm were filed by the attorneys > general of the following states, who should be either removed from or > voted out of office. Even if SF were not nearly as rotten as Allstate, > we feel it is improper for our government officials to fly to the > defense of a giant insurance company which has a proven record of > maltreating citizens. The states which are a better friend to the > insurers than to the voters are: New York, Massachusetts, Nevada, > Pennsylvania, and Texas. > > Worse, yet, although we have previously mentioned that Nader's group is > now a captive of the insurers, Public Citizen, the Consumer Federation > of America, and the Public Interest Research Group also sided with the > giant insurer. We will look at their claims of "consumerism" with a > much more jaundiced eye in the future. Few "consumer" organizations can > have failed to receive tons of mail from insurance company victims -- > heck, we're much smaller than they are and we do. Someone at these > organizations is either blind or knows what side their bread is buttered > on. > > Other Items: Some of you are no doubt aware of this utility, but we just > received the application for the Pacer system, which allows any citizen > with a PC and a modem to access case records of the several federal > district courts. The fee is sixty cents a minute (although in our > opinion it should be free, since we as taxpayers have already paid for > the system.) Still, this is cheap as databases go, and the time will > mostly be spent on searching, since downloading is quick. And you may > find some shockers as regards insurance companies. For some odd reason > you have to apply by postal mail. You can get the application form by > calling 1 800 676-6856, or by emailing firstname.lastname@example.org > or postal mail to PACER Service Center, PO Box 780549, San Antonio, TX > 78278-0549 > > Finally, the Amicus Curiae information was compiled by Sheila Loftus, > publisher of Hammer and Dolly, a trade publication for the collision > industry which often has information on insurance company skulduggery, > since they have a great impact on the collision industry. She can be > reached at email@example.com or by phone at 202 244-0178 > > Yours, > > Jim & Paula > > -- > Come To "You're In Bad Hands With Allstate" (and others) > at http://www.insurancejustice.com/ > and find out why you're NOT insured. ---------------------------------------------------------------------- From firstname.lastname@example.orgWed Nov 25 02:23:45 1998 Date: Sun, 22 Nov 1998 12:37:37 -0500 From: Jim & Paula
Subject: New SF Class Action First Item: New Class Action Against State Farm "State Farm faces another class action suit. While it's limited to Ohio at this point, it may bear watching. This one takes issue with SF's methodology for calculating 'cost of repair.' The impetus for the suit is two insureds whose estimates were rejected by State Farm. The suit alleges that SF has an internal "secret" definition for "competitive bid," which requires that it reject any truly competitive bids submitted by its policyholders. This leads to the issue of reference surveys which, the suit alleges, do not result in competitive prices. Calling the surveys 'bogus,' the suit details why they do not lead to prevailing competitive pricing. A lawyer for the plaintiff said the survey isn't for price at all, but for a 'prevailing competitive labor rate.' The underlying charges are breach of contract, breach of duty of good faith and fair dealing, and breach of fiduciary duty. (Reprinted from CRASH Network bulletin -- which contains a lot of info on the autobody industry and insurance company malfeasance. Contact Sheila Loftus at email@example.com for content and subscription info.) Oddly enough, the dentist's case also involves some sort of secret list. Secrets seem a real motif with the insurance industry. -- Come "You're In Bad Hands With Allstate" (and others) at http://www.insurancejustice.com/ and find out why you're NOT insured --------------------------------------------------------------------- Insurance News Network - States State Farm being sued over medical examiner One of State Farm's customers is suing the auto insurance giant, claiming that the company flew in a biased doctor to perform an independent medical review. Tracy Shaw, a resident of East Aurora, N.Y., filed suit against State Farm Automobile Insurance Co. in December 1998. She claims that the company paid for Dr. Carl Valvo to fly from Yonkers to Buffalo in order to have him recommend that the company deny her claim for medical benefits. Shaw was hit by a pickup truck in March 1997 and was receiving treatment for a back injury resulting from the accident. She claims that she had to see her own chiropractor to repair the damage caused by Dr. Valvo during his examination, and that she suffered emotional trauma from his subsequent report to State Farm. Insurance companies routinely employ doctors to conduct these exams to determine whether someone filing a claim actually needs medical benefits. They're called independent examiners because they have no prior relationship with the patient. Impartial doctor or hired henchman? State Farm insists that it uses Dr. Valvo because he is the chairman of the New York State Board for Chiropractic. "We use him because he has a reputation for being objective and because of his high credentials," says Heather Thomson, a spokeswoman for State Farm's northeast region. But Shaw's attorney tells a different story. "There are two sets of fact patterns indicative of a bias," says Christopher O'Brien of Ballow, Braised, O'Brien & Rusin, a law firm in Williamsville, N.Y. "There's the fact that they're flying in Dr. Valvo from Yonkers even though there are over 100 chiropractors in the western New York area, and in fact State Farm uses some of these other chiropractors on their cases." O'Brien also points to the wording of a notice that State Farm sends out notifying people that they need to attend an independent medical exam. He claims that the notice leads people to believe it's their responsibility to procure medical records and take them to the exam appointment, when in fact it's the responsibility of the insurance company. "One of the most basic regulations is that an insurance company should not treat their insured as an adversary," O'Brien tells INN. And he believes that sending out such a notice constitutes adversarial treatment. State Farm officials decline to comment on the wording of the notice because it's part of the documentation involved in the lawsuit. New York state law doesn't allow private citizens to sue insurance companies for unfair claims practices, so Shaw and her attorney are bringing suit against State Farm for fraudulent business practices. Shaw is seeking $50,000 in compensatory damages and $250,000 in punitive damages. O'Brien says that they are seeking punitive damages because they're dealing with one of the largest insurance companies in the nation. "If you don't ask for punitive damages, they're not going to pay attention," he explains. He says that Shaw would be willing to drop the suit if State Farm would agree to stop flying Dr. Valvo around and to change the wording of its medical-examination notice. State Farm's lawyers have not yet responded to the suit. Last updated Jan. 8, 1999 -------------------------------------------------------------------- THE DIRTY TRICKS DEPARTMENT: EVEN WHEN YOU WIN - YOU LOSE! JUST S.O.P. FRON STATE FARM AND THE INSURANCE CARTEL February 12, 1999 Lawyers Appeal State Farm Settlement ______________________________________________________________ Filed at 6:29 p.m. EST By The Associated Press BLOOMINGTON, Ill. (AP) -- A lawyer for six people in a class-action lawsuit accusing State Farm Insurance Co. of fraudulent sales practices said Friday he will appeal a $238 million settlement agreement. Under the agreement, State Farm would make varying payments -- averaging about $1,300 -- to every one of the 3 million customers represented by the class action. However, those entitled to a larger award must undergo what lawyer Kenneth Nelson described as a confusing claim process. ``We believe that will have the effect of discriminating against policy holders who are poor, disabled, elderly, unsophisticated -- in other words, the easiest targets for fraud,'' said Nelson, of Kansas City, Mo. Any appeal would only serve to stall State Farm's payments, said Tom Schneider, a State Farm lawyer. McLean County Judge Ronald Dozier approved the settlement on Thursday. The lawsuit contended that State Farm cheated people while selling them whole life and universal life insurance policies from January 1982 to December 1997. In August, State Farm agreed to settle the lawsuit in order to avoid a protracted trial. In Thursday's agreement, the company does not admit to any wrongdoing. Each member of the class will get the initial payment. Others who allege they are entitled to more must apply to an independent company. That neutral firm will determine the size of the additional award using an intricate scoring system. However, State Farm expects as few as 5 percent of those eligible for a larger award will apply. ``The fact of the matter is, of the 3 million, only a handful are going to actually follow the claim relief procedure,'' said Robert Cummins, a Chicago lawyer who also objects to the settlement. ``And that's only if the folks step through the hoops correctly. But my goodness, the folks in the complaints are elderly, unsophisticated people,'' Cummins said. It is common for complicated, legalistic notices to deter members of a class-action from filing for a claim, said Robert Hunter, director of insurance for the Consumer Federation of America. ``You get a big, 65-page document, or 50 pages or something, and it's just incredibly intimidating,'' Hunter said. ``First of all, are you going to read it? And if you are, can you understand it?'' The lawsuit accused State Farm of duping policy holders to switch policies and lose value; promising unrealistic returns on cash value policies; inflating dividend projections; and soliciting sales by referring to life insurance policies as ``investments'' and ``retirement plans.'' _________________________________________________________________ Copyright 1999 The New York Times Company The information contained in this AP Online news report may not be republished or redistributed without the prior written authority of The Associated Press. ===================================================================== Also see
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