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.