In the midst of what is becoming a never-ending string of legal motions, complaints, and filings, the Scruggs Katrina Group filed yet another law suit in Mississippi that alleges a pattern of collusion and fraud between State Farm, an engineering firm, and an independent adjusting company. The suit was filed in the U.S. District Court for the Southern District of Mississippi under the federal Racketeer Influenced Corrupt Organization Act ("RICO").
The Glenda Shows case, which consists of 21 property owners whose homes were damaged or destroyed by Hurricane Katrina, alleges that State Farm proactively sought to avoid paying claims. The company is accused of working with third-party providers Forensic Engineering and E.A. Renfroe to create and use false engineering and inspection reports that would attribute losses to water and storm surge, which is traditionally an uncovered peril under most homeowners' policies.
"The case is important because it exposes a scheme that has existed in the insurance industry between hired gun adjusters and unscrupulous engineering companies long before Katrina came along," said Scruggs, in a release. "Some of the same company people behind the Katrina inspection scheme were involved in cheating homeowners who were tornado victims in Oklahoma, and earthquake victims in California."
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