Another Good Discovery Order Concerning State Farm

I have published on four occasions concerning good orders coming out of the Barten v. State Farm case.1 Well, it seems more courts are issuing favorable discovery orders, including a recent ruling from a federal district court in Arkansas.2

At issue in Sims v. State Farm Mutual Automobile Insurance Company, was the policyholder’s motion compelling State Farm to produce information relating to the carrier’s business model for claim underpayment. The Sims decision is short, so I encourage everybody to read the opinion in its entirety. This sentence from the decision, however, should give you a flavor:

[A]n insurance company has a financial incentive to deny a claim: obviously, it does.

And here are the CliffsNotes of the Sims order:

  • “State Farm must produce the requested claims-handling materials that relate to the handling of underinsured motorist claims in Arkansas even if those materials had ceased being used when Sims’s accident occurred.”3
  • State Farm was ordered to produce materials concerning its Total Evaluation and Claim Handling (T.E.A.C.H) program courses.
  • State Farm was ordered to produce materials concerning the compensation/bonus/incentive programs in place for carrier employees involved with Sims’s claim directly and/or at the supervisory level.4
  • State Farm was ordered to produce materials concerning its Achieving Claims Excellence program.5
  • State Farm was ordered to produce materials concerning its document retention policies. Reason being, State Farm was telling Sims that certain materials produced in other litigation did not exist.
  • State Farm was ordered to produce information whether any employees related to Sims’s claim were disciplined for failing to meet the carrier’s claim payout agenda. And, similarly, State Farm was ordered to produce information concerning State Farm’s evaluation of personnel involved with Sims’s claim directly or at the supervisory level.

There is also some favorable language on pages nine through eleven of the opinion concerning application of the work-product immunity and attorney-client privilege objections when it comes to a policyholder’s “claim file” request. In sum, policyholder advocates should make use of the Sims decision.


1 Barten v. State Farm Mut. Auto. Ins. Co., No. 12-399 (D. Ariz.).
2 Sims v. State Farm Mut. Auto. Ins. Co., No. 4:13CV00371 (E.D. Ark. Apr. 30, 2014).
3 Id. at 4.
4 Such programs, of course, are geared toward monetarily rewarding employees for their augmentation of corporate profit through claim underpayment.
5 Again, the claims excellence that State Farm desired from its personnel through this program was the lowering of claim payout in order to increase corporate profit.

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Comments (2) Read through and enter the discussion with the form at the end
Jackie Long - November 19, 2014 11:34 PM

Is there some kind of "magic" out there to get State Farm Insurance to pay your claim when your home is destroyed, lost just about everything, and both disabled and stressed beyond belief as can't believe a corporation can destroy your life just for enduring a hurricane? Seems the gov on many State levels, as well as Federal allows them to do whatever they want without any consequences. WHY?
I have lost hope that we will ever see a dime and they act like they are the victims, it's been six years and they want things that don't exist as the house was hit by a hurricane, and very little was left undamaged or soaking wet. Why do we have to pay them when they have no intention of paying claims when they are filed? Worse yet when you question them or call them on their own lack of honoring their own contracts they become accusatory and act like we are the ones in the wrong...they treat everyone like they are liars when the only liars in the room are State Farm their lawyers and Agents and they rather pay lawyers and lobbyists or buy of Supreme Court Justices then simply pay the claims that would probably cost a lot less. Totally adversarial attitude with no respect for their own clients. At the end of my rope and sick of being treated like we did something wrong by just filing a claim. If anyone has any positive info on how to deal with them please pass it on at the end of our rope...

Jeffrey Greyber - November 20, 2014 9:48 AM

Jackie,
Unfortunately, what you speak of is all too common. For the past 30+ years, the claims department for most (if not all) insurance companies has operated to augment corporate profit through a very simple (yet effective) war of attrition strategy: delay the claim, deny the claim, and defend the claim until, at one of those junctures, the policyholder will just go away. Please give me a call if you would like to discuss your situation: (561) 855-2120 (office).

Thank you,
Jeff Greyber

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