State Farm Hit with $14.5 Million Dollar Defamation Verdict
Ed Rust, Jr., State Farm's Chief Executive Officer, must not have liked reading the headlines following a defamation verdict in favor of an Indianapolis restoration contractor that State Farm accused of fraud.
The Indianapolis Business Journal reported that:
A...jury has awarded a local contractor $14.5 million in his prolonged legal battle with State Farm Insurance following a 2006 hailstorm that caused severe damage in central Indiana.
Joseph Radcliff, owner of CPM Construction...received the verdict on Wednesday after he countersued the Bloomington, Ill.-based insurer in March 2009.
The countersuit responded to an October 2008 complaint from State Farm claiming Radcliff committed fraud to obtain funds from the insurer by inflicting intentional damage to roofs of its clients to simulate hail and wind damage.
State Farm said Radcliff committed fraud on at least 10 occasions by intentionally damaging property in Indianapolis, Carmel, Fishers and Noblesville.
According to a former CPM employee, Radcliff commonly told workers that “the only way to make any money is to create your own damage,” State Farm’s complaint said.
Through its investigation, State Farm provided information about Radcliff to the National Insurance Crime Bureau, which forwarded it to the Indianapolis Metropolitan Police Department. The Marion County Prosecutor’s Office brought 14 felony counts against him in September 2008, which were later dropped.
Radcliff countersued, charging that State Farm slandered and defamed him with its allegations. He further said the former employee who made the damaging comments to State Farm did so because he was terminated for non-performance.
This result was preceded by an Indiana news report that indicated:
Radcliffe's employees, who made most of the claims, have since backed off their original statements, as well as a key witness who said he saw Radcliffe damage roofs, prosecutors said.
Radcliffe was accused of engaging in what is known as dime spinning, a practice in which dimes are used to damage shingles, in an effort to reap large settlements on houses insured by State Farm.Officials said at the time that the fraudulent activities cost the company $1.75 million.
Radcliffe has always contended that he would beat the charges. He told Sanchez that he will break his silence soon in an effort to rebuild his reputation.
It appears that Radcliffe has been pretty successful in clearing his reputation.
Congrats to the contractor. It's always nice to see someone stand up for themselves and come out a winner.
Next we need to see someone stand up to QBE and fight the constant fraud accusations they spew.
A few years ago I saw an article about the OK State Atty filing bad faith charges against State Farm for using HAAG Engineering to deny and "low ball" claims.
A jury awarded $12 million to State Farm's victims.
I have seen this type of accusation thrown around by carriers and their experts for years. Although I have personally seen self-inflicted damage to roofs, these types of occurances are rare.
I was recently involved in a large claim in Palm Beach County Fl. where the carriers expert stated that the roof was damaged by human manipulation. He observed one hand print on one tile of the 50 roofs in the complex and came to that ridiculous conclusion. The scary part is that Citizen Insurance believed him!!
Are there any exceptions from the general rule which would disallow State Farm from having the right to subrogate payments it made for med pay against insured's bodily injury recovery. Thanks.
Also, State Farm defamed my clients stating the accident was faked up and this went on for several months. They finally paid for the car and the rental. However, even this was an issue as they lied and stated the ACV was lower than it should have been as the car had about 50k miles when the car only had about 18k miles, which was proved by the maintenance records shortly prior to the accident. Now they are still not paying for the clients' UM plate.
What do you suggest?
I was involved in the Joe Radcliff versus State Farm case since I witnessed Mr. Radcliff doing nothing to our roof and State Farm actually came to me (and some other homeowners) and said that if I agreed to testify against Joe Radcliff, they would replace our roof at no charge under a vandalism clause. Of course I refused to do that and they refused to replace our roof. I then testified against State Farm in court (they also tried to get me to say Mr. Radcliff shoved one of their adjusters, that didnt happen either) and I was extremely happy when State Farm was found guilty of defamation and Mr. Radcliff was awarded $14.5 million dollars. I would suggest that EVERYONE should boycott State Farm Insurance!