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Walker says no to Rigsbys

Federal Magistrate Judge Robert Walker has sided with State Farm Fire & Casualty Co. in a tug-of-war over engineering reports at issue in a whistle-blower lawsuit.

Walker has decided State Farm should not be required to turn over the reports to former insurance adjusters Cori and Kerri Rigsby, who filed the lawsuit alleging State Farm committed fraud in adjusting Hurricane Katrina claims. The company denies minimizing wind losses by blaming damage on tidal surge covered through federal flood insurance.

The Rigsbys' case is limited to one Biloxi policyholder's claim because the sisters have personal knowledge about how it was handled, a requirement of the whistle-blower law. The Biloxi claim of Thomas and Pamela McIntosh included two engineering reports: The first cited wind as the main cause of loss, while the second concluded tidal surge was responsible.

The Rigsbys subpoenaed other altered reports State Farm might possess, but State Farm objected, leading to Walker's ruling.

Because the trial, scheduled for late 2010, will be about the McIntosh claim, Walker reasoned State Farm should not have to turn over engineering reports about other claims. The Rigsbys had hoped to establish a pattern of fraudulent claims handling, an allegation State Farm denies.

The Rigsbys maintain in court records that the engineering company responsible for the McIntosh reports, Forensic Analysis and Engineering, has turned over 19 other altered reports. The whistle-blower suit named Forensic as a defendant, but the Rigsbys and Forensic have tentatively settled their differences. The settlement can be finalized only if it is approved by the U.S. Attorney's Office, which has declined to prosecute the lawsuit on the Rigsbys' behalf.

H/T to SOP at slabbed.wordpress.com for the heads up that Walker had ruled on the Rigsbys' request for those State Farm reports.

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