Insurance Coverage Blog

Lots of e-mails from readers yesterday about this story by Anita Lee in the Sun Herald on Kerri and Cori Rigsby. The story is headlined "Under Pressure," which means we better cue up the You Tube video of the David Bowie song of the same name. The lyrics, in case you can't understand the words, include the following:

Pressure pushing down on me
Pressing down on you no man ask for
Under pressure
That burns a building down
Splits a family in two
Puts people on streets

. . . . .

Its the terror of knowing
What this world is about
Watching some good friends
Screaming let me out
Pray tomorrow takes me higher
Pressure on people

. . . . .

This is our last dance
This is our last dance
This is ourselves under pressure
Under pressure pressure

(I also link to this version with Bowie and Annie Lennox, not as spirited as the first one, but it's worth it to see these two great performers together).  A very good song, so good one could ask whether the lyrics rise to the level of poetry.  I say: certainly, if poetry expresses, in shorthand and without the conventions of expository prose, some truth about human experience.   "The terror of knowing what this world is about," is what it says.  Means different things to different people in different circumstances, but we've all been there, haven't we? Litigation is machinery that tears people's lives up, lawyers and litigants and witnesses, it can rip the soul right out of you if you're not careful. Pressure. Pressure on people. 

Before we look at the story, one more thought to brace us for the journey. Do you remember in Dickens' David Copperfield, the opening, those great, great words? "Whether I shall turn out to be the hero of my own story, or whether that station will be held by any one else, these pages must show."  Perfect beginning, perfect words. Aren't we all tempted to see ourselves as the hero of our own story? But as David Copperfield implies, this determination is not up to us -- it is something "these pages must show." There is also something ominous in those words: they foreshadow that the narrator will be both subject and object, a mere bit player in scenes of his own life.  Even  though we may write a page in the book of life, we delude ourselves by thinking we determine life's course.  Life mocks our attempts to control it, and we act as a Sorcerer's Apprentice, releasing forces whose power we only dimly realize.  And as the opening of Copperfield suggests, in your own story, in my story, in our story, we may turn out not to be the hero, and what's worse, our story may not necessarily be all about us.  We forget this, but we would do well not to forget it.   

Now let's look at the Sun Herald story.  First, let's look at this excerpt:

The sisters said they were naive in February 2006 when they first reported in a meeting with policyholders' attorney Dickie Scruggs what they called underhanded tactics at the State Farm Catastrophe Office.

"It was a tough decision, but we just needed help and needed somebody to stop what was going on," Kerri Rigsby said. "We didn't know what we were getting into at the time.

"I would do it again. I wouldn't recommend it to anybody else. We just definitely didn't know what to do. I guess, in my wildest fantasy, I thought that Dick (Scruggs) would just fix it."

As it turns out, they didn't know what they were getting into with Scruggs or State Farm.

With Scruggs, they unwittingly stepped into a political, legal and ethical minefield.

And let's note this later section of the story:

The Rigsbys hoped to remain anonymous when they went to Scruggs, taking with them records from State Farm files. They had begun saving and copying the records in the fall of 2005. As events unfolded, they say they realized anonymity would be impossible.

How plausible is this? The way the story says it, they first "reported" to Scruggs in February 2006. Yet the story also says they began saving and copying records in the fall of 2005.  Did they do this solely on their own?  Did Scruggs ask them to do so, directly or indirectly? These are important questions, for their testimony under oath has been they did not meet with and form an attorney-client relationship with Scruggs until February 2006.  Yet knowing how adverse almost all people are to "begin saving and copying records," one must inquire further about the reason they would go counter to this fundamental and recurrent feature of human psychology, especially since their conduct just happened to match with Scruggs' agenda and litigation plans, and they just happened to meet secretly with Scruggs and the Trailer Lawyers, and they just happened to illicitly access State Farm computer files in the exact order of a list of Scruggs' plaintiffs. 

These questions are not answered or addressed in the story, and the story does not tell us why they are not. In that these questions are central to the litigation mess the sisters find themselves in and about which they complain, one might expect these questions to be explored in the story, but again, they were not. 

Let's go forward just one more yard here, by taking a look at another piece of the story:

The sisters said they acted on their own when, over a weekend in June 2006, they downloaded thousands of pages of records from State Farm computers. They used a State Farm engineering roster and a Scruggs client list to decide what records to download.

"I knew that as soon as we did the data dump, we would lose our jobs," Cori Rigsby said. "I knew we would lose our careers."

The "acted on their own," is what it says. There is more than one connotation to this phrase.  We know some friends helped them out in the physical tasks of the data dump, so the statement is not literally true and therefore might be taken to mean they continue to claim they did not perform the data dump at the direction of Scruggs or others. But the phrase does not even quite say that.  We know AG Jim Hood's office sent someone to pick this stuff up right after it was copied.  How did he hear about it? But more than that, do you see the limiting perspective of the phrase "acted on their own"?  It stops short of addressing its own implications, and therefore does not reveal all that stuff that might be uncomfortable to talk about.  For example, the phrase can also be taken to mean merely that their conduct was volitional and that Scruggs was not physically involved in the tasks themselves.  It is quite difficult to picture a scenario where the Rigsbys decided, solely on their own, to copy thousands of pages of documents that were later used in litigation as purported support for their allegations.

Again, human nature is not to engage in a potentially fruitless frenzy of weekend activity involving playing with thousands of pages of paper.  This type of behavior is more typical of some larger plan. In that it has become manifest that a larger plan involving the Rigsbys had been activated some time prior to this, that this plan was carried on covertly, and that this activity has been found to create ethical problems justifying the disqualification of lawyers and the Rigsbys as witnesses, it is legitimate to inquire further as to the meaning and credibility of "acted on their own."  How does the data dump tie in to the accessing of the State Farm servers during the March 11 Trailer Summit, attendance at which is a point of hot contention at present? 

Also, staying on this point for the moment, what of the Lee Harrell deposition, in which he testified that Scruggs claimed, in a December 2005 meeting with Harrell and Insurance Commissioner George Dale, that he had corporate insiders at State Farm and was going to work this just like he and Mike Moore worked the tobacco litigation? The question, once again, is what of this testimony?

In that there is no apparent motive for Lee Harrell to make up this meeting or what was said in it, let us assume for purposes of argument that this testimony has credibility.  Who were these insiders? In the time since December 2005, no other State Farm "insiders" have surfaced, and we would surely have seen them by this point if there were any others.  So the logical inference is that Scruggs' reference was to the Rigsby sisters.  Remember two facts -- they say they began copying and keeping records in the fall of 2005, and they say they did not "report" to Scruggs until February 2006. There are several discrepancies here then that justify further inquiry.  I don't need to belabor it, you can see if for yourself.

Let's switch gears just a bit.  Although in this story the Rigsbys seem to be generally aligned with Scruggs, there is the germinating seed of a new narrative:

"I knew that as soon as we did the data dump, we would lose our jobs," Cori Rigsby said. "I knew we would lose our careers."

They told State Farm executives the following Monday what they had done and were soon out of work. Scruggs followed his tobacco playbook, offering them consulting salaries of $150,000 each to come to work for him on policyholder cases. He also planned to use them as witnesses in those cases.

The sisters had no familiarity with attorneys' rules of conduct. To pay witnesses is unethical.

Again, following his tobacco game plan, Scruggs took the Rigsbys to the media and pursued political options to pressure State Farm. 

Let's just accept this at face value, these statements, because our purpose is to examine them for an indication of where the Rigsby narrative will lead next.  They aren't quite making Scruggs the fall guy for their problems yet, but the door is open. They were "naive," they "had no familiarity with attorneys' rules of conduct," they didn't realize that "to pay witnesses is unethical." You will notice that the obverse side of the coin -- that in order for it to be unethical for lawyers to pay witnesses, it must be unethical for witnesses to accept money from lawyers -- is not addressed.  That seems to be the direction they are traveling -- maintaining that what they did was according to sincere belief, but that to the degree what they did was illegal or unethical, they were led into it by Scruggs and his "playbook."  I think, but I do not know for sure, that Scruggs is still paying for lawyers for the sisters.

This road has some bumps and twists and turns, because they have testified that, contrary to the implication of Scruggs' alleged statement to Harrell and Dale, they were not working with Scruggs before February 2006.  So there are some hard and fast facts they have testified to, and their own testimony under oath can't be blamed on Scruggs.  The fluidity of the narrative, in other words, has some limits which they themselves have prescribed.  Let me be clear: I make no judgment or representation as to the truth of their statements.  I merely note things that don't make sense as the facts are currently known. 

Let's look at another thing from the story, the last line, which says:

During countless hours of questions from corporate attorneys, Kerri Rigsby said at one point they produced an 8-by-10 photo of her dog, Payton, and asked about him.

Now, let's try to make sense of this.  The hours of the depositions in fact are not countless, because one could count them -- the time of beginning and concluding are noted in the transcript of the depositions.  But why the questions about the dog? Was this some frivolous harassment?  ("Who do you think would win in a fight between a T-Rex and King Kong? Who put the "Ram" in the Ramalama Ding Dong? Please, listen closely to my question and answer that question.") 

The questions about the dog appear to me to be aimed at the hypothesis explained below.  In the May 1, 2007 deposition of Kerri Rigsby, this questioning, beginning on page 36 and continuing to about page 46, appears designed to explore additional living expenses paid under the State Farm policy of the Rigsbys' mother, who was uprooted by Katrina damage.  To collect additional living expenses under the contract, you must have additional living expenses. And when living with a family member, you must provide a tax ID number or Social Security number of the family member.  Kerri, according to her testimony, executed a lease agreement with her mother for $2,800 a month so her mother could collect these expenses, and said: 

Absolutely. I wasn't going to let her live there for free. (Page 39, lines 21-22).

The money collected, however, appears from the testimony not to have gone directly to Kerri Rigsby but into an account for something called Payton Properties -- recall that Payton is the name of her dog, and recall also that there exists an 8 by 10 photo of the dog that was produced at the deposition.  The account, it seems, was not for the dog, however, despite the name of the company. It was, however, named after the dog, of this we can be sure.

Kerri testified this company did not have a tax ID number and was not registered with the state.  Kerri testified she did it this way because this was the advice of the lady at the bank -- "note to self, must resolve not to follow advice blindly from whomever offers it".  Kerri testified that Payton Properties was synonymous with Kerri and Kerri only.  Her state of being therefore was unique to the personhood of Kerri Rigsby herself and did not extend to members of the animal kingdom.  Again, the account was not set up for the benefit of the dog, although it was named for the dog.  The testimony does not reveal if the dog received incidental benefits from the use of its name, such as perhaps a Milk Bone, extra kibble or additional petting and kind words. But some things seem clear: the dog was not the actual holder of the account and the dog did not control or share in the money, nor did the dog exercise authority over the company bearing its name.  

Additionally, I suspect the point in asking about the taxpayer status of Payton Properties -- remember, named after but not controlled by the dog, so the dog cannot be blamed here, nor does it appear the dog provided advice in any respect -- and whether this sub rosa company's income was reported to the Internal Revenue Service and whether $2,800 per month was a fair market value for the lease. In other words, the hypothesis being explored was whether the insurance claim was inflated to channel money to Kerri Rigsby which was then not reported as income.  This much is apparent to me in reading the transcript, and would be to anyone else who cares to read it as well.  I don't know the truth of the hypothesis, but the existence of the hypothesis was the reason for the questions, not idle curiosity about the dog, whom you will remember, was named Payton, and of whom at least one 8 by 10 photograph exists.  

Now, when someone gives an interview, if they make it seem like big bad lawyers are picking on their puppy and this turns out not to be a complete version of events -- whoops, forgot to mention that unregistered company created to accept insurance dough -- one begins to suspect a few other things about the statements made in the interview as well.  Of course, the dog thing is just a line in the Sun Herald story, so we don't know exactly what Kerri Rigsby said about the dog or the questions that led to the statements.  The implication of the line in the story, however, is that Kerri Rigsby stated an outrageous example of the harassing character of deposition questioning. From the evidence of the transcript, I would have to disagree with that assessment. 

Incidentally, all the Rigsby depositions I have are available at this post.  For free, too.

The Rigsby Sisters fairly saw a clear path to clean a messy situation, and it is quite possible that all the defenses in insurance law have already been experienced, e.g., in Homestead, Fl, and in a few less known but other hurricane damage problems. You simply have to recognize that people who finance a home don't always read their insurance contract, but the hired adjusting that I know follows a hurricane on the coast (I was in George), usually don't care much, and aren't in good hands.

On one side, or on the other, the facts are not too far outside, and I don't think Rogue - my new word - players would be going it alone if a lawyer was making offers. In the main, there is a serious exception to all contract problems, however widely spread, and that is "fraud". It may be simply that the first impressions of the Rigsby's was a "fraud" because a lot of people apparently did. Simply, poor people don't pay cash and must sign on with insurance companies who try to exclude, right or wrong, but both banking and insurance monies are effected.

If there is agency or generic "fraud" in the management of claims, there is a duty to report it - and not to the company, as this is always stupid, because you get nowhere. Fraud vitiates all doesn't have exceptions or exclusions, and it's a pity that some law in some insurance policy coverage is probably totally right in contract, but could actually be twisted in the actual use of people pleasing the company. Or worse, the company wants and needs to re-do the issue. If there's a hurricane, there's almost always some discussion of fraud in adjusting. I don't blame the insurance company, but if there's so much to run away from (as happened in Homestead, Fl), the public doesn't need insurance. And, as "non-concurrent clause" is a defense against a claim, and you must know that the home-buyer can't get the home without the signature on the contract, the money from the bank, it's the poor man who suffers. That doesn't mean there's a right to accuse a company of wrong-doing. But first thing - fraud is usually only understood in legal format. But non-legal minds can see harm. It's the simplicity of depending on the service of money to buy to incorporate that coverage which puts insurance bosses into Tweeds and poor loss victims into rage. It's commerce.

I don't think seeing any lawyer would have done the trick. Dickie Scruggs, for what you don't like, will make something happen, and so, I do wonder where the world would be without insurance, maybe not such a bad idea perhaps, and, I also wonder what the world would be like without a Scruggs.

I think the Rigsby's are victims. Not heroines, as such, but not without failure, just putting the faith in the system - on both sides of the issue.

If we believe in anti-gravity, we can believe in anti-concurrent, but I imagine it's mostly in science fiction, or in a fallacy because it has to be contrived. Insurance is contrived to provide money. To keep money. Lawyers, acting in good faith but with a measure of fearlessness, aren't idealistic but usually provide the service for the money. It's business. The constant victim is that everything that happens in these matters is always remembered.

Remembering isn't going to change like the law changes, but the idea of clean hands is like being in "good hands", as the old ad said, and, in spite of everything, the morality of creative escape, in clauses and contracts, doesn't rise with the wind and the water, but is naturally given it's own indignity. Insurance isn't a necessity. It's contrived, and maintained, and morality may actually be like Newtonian gravity perception in that you may think you can be morally superior because of words in contracts, but you will always be remembered for having tried to change what is truly the natural force in morality that pulls upward as anti-gravity. Someday there will be recall. But there is always relativity.

Good job with the dog explanation. I'm glad you cleared that up. I was going to start blowin' snot bubbles if State Farm was going after the dog.

I remember that the initial association of the Kerri sisters with Dickie Scruggs came through their mother, rather than the sisters themselves. Perhaps, back in the fall of 2005, Cori and Kerri's mother had mentioned to Dickie Scruggs that her daughters were working at State Farm and copying files that indicated fraud in the handling of the State Farm claims. Perhaps mother and Scruggs even discussed Scruggs' interest in the documents. At that point in December 2005, Scruggs would have known of the "insiders" activity from their mother--- thus the threat to George Dale--- although he'd had no personal contact with the sisters. Then in February 2006, there was the first actual meeting of Scruggs and the sisters.

I'm pretty sure you cannot open a bank account without a tax ID or SSN.

What a coincidence that in the course of one week both Jim Hood and the Rigsby sisters find the good fortune shelter of an Anita Lee exclusive in which to "tidy up" certain aspects of their respective testimonies.

One would have to wonder if the parties' spinning to the press isn't associated with some level of anxiety that potential other shoes were nearing an apex from which they could be dropped.

There appears to be an underlying theme that points to the root of the Scruggs/Rigsby motives....Mother. "Who was at the meeting in the trailer? Mother." "Who drove you to the meeting? Mother." " Who introduced you to Dickie Scruggs? Mother." "Who lived with Cori and Kerri following Katrina? Mother."

Seems to me the sisters allowed Mother access to confidential documents, and Mother set the wheels in motion for the sisters to blow the whistle.

I don't think the poor dog cared one way or the other.

===To collect additional living expenses under the contract, you must have additional living expenses. And when living with a family member, you must provide a tax ID number or Social Security number of the family member. Kerri, according to her testimony, executed a lease agreement with her mother for $2,800 a month so her mother could collect these expenses, and said:

Absolutely. I wasn't going to let her live there for free. (Page 39, lines 21-22).

The money collected, however, appears from the testimony not to have gone directly to Kerri Rigsby but into an account for something called Payton Properties -===

I find this highly dubious."I wasn't going to let her live there for free. " I would never charge my displaced parents rent and at a rate of $2800? Right.

Did the Rigsbys negotiate with Anita beforehand and say, "you can go here, with your questions, but we won't let you go there?" If that kind of condition is placed on a reporter, does the reporter have an obligation to confess it? If no such condition was placed on Anita, was she asleep at the switch when all the important quesitons about "mother" and "who was in the trailer" could have been, but were not, asked? It would seem to be questionable reporting in the case of the former, or negligent reporting in the case of the latter.

Scruggs got sloppy with the paid fact witness arrangement that worked so well for him before which in some cases included cars, boats, houses and millions in fees to each fact witness laundered through a staff member, sometimes laundered through a small out of state law firm. Compared to earlier tactics, these fact witnesses' illegal contract was less lucrative than illegal contracts paid in the tobacco case.

As for the ALE issue, I would venture to guess that Kerri used her own SSN to open the Payton Properties account. I would also venture to guess that there is a lease agreement between Payton Properties (vs Kerri since she was working for SF at the time, and PP sounds more like a commercial real estate company) and Mother Rigsby for $2800 that was given to SF for collecting the ALE. Now I don't know what type of house that the mom had before Katrina, but ALE is generally paid to put the person is similiar housing to what they had (ie if you lived in a trailer before the storm, you aren't entitled to rent a 10,000 sq ft mansion after it), but I would think that the $2800 per mo would rent a pretty nice furnished house, where you wouldn't have to live with a family member. I hope that Kerri was above board with the tax ID on this, and also paid the proper taxes to the feds and the state as this money would be income and subject to taxes that apply for rental properties. On the subject of income, it seems like I saw once that they hadn't filed taxes for the years of 05 and 06, but maybe I am wrong here. Seems like there was a request in the lawsuit for tax and banking records and they hadn't been provided yet. I would guess that was a request made to document if any money went to them (besides from Renfroe) before the dates that they and Scruggs admit they started getting paid by SKG.

As someone who happens to be close enough to the situation to know the actual facts, I thought you might appreciate something more than pure speculation on the topic. When Lecky King assigned an adjuster( whom the Rigsbys knew very well) to the Rigsbys' mom she let them all know that it was imperative that they not divulge the fact that they were relatives in order for the adjuster to remain neutral and fair. State Farm did not have to pay ALE if the damage was from flood only. Since the mother was out of her home due to wind & water damage she was due ALE for a predetermined length of time. There was actually nothing available immediately for the mother to rent so while getting on a wait list for a condo she rented from her daughters. After consulting with a lawyer and a banker she was assured that Payton Properties or any name they chose would be appropiate as long as it was reported on the tax returns. This solved the problem of the adjuster seeing the Rigsby name on the lease agreement. I'm quite sure that Kerri's comment about not letting her live there free was said tongue-in-cheek as the mother and daughters seem to be very close.

If I'm not mistaken it is in deposition that the mothers "rent" was Lecky Kings idea anyway. But we know that King is not talking.

Bothered, the shaft about boats, cars, houses...wrong again. But what's the problem? So did the new ABA journal get the same. Repeat the repetion.

Remember all this talk about how the publicity machine of Scruggs, Moore, Lott, Dick Morris, and those people actually manipulated facts of those very old events...? Well, yes or no - it's not anything to put your money on. Your same ignorance of the facts should be called to accountability, but it's not your fault and ignorance in a political machine that ran hard and fast in Dick Scruggs' masterful protection of Moore's office in the 90's, and the only relavant point in picking out that is sarcasm because you don't have the law or the facts.

I wish you could have seen the books. And facts are nice too. I think Goebel's had it right - repeat it enough and it's true.

Pop a cold one and relax. There's not enough in your lifetime to know the structual drawings in M&S, e.g., which is part of your griping. Get your own
ill-gotten gains and stop whining about Scruggs' infamy. Better yet - get your own infamy.