The RICO lawsuit noted in, Lawsuit Alleges Field Adjusters Stated Under Oath That Florida Based Insurer Commanded That Reports Be Altered To Reduce Or Deny Claims—Did Insurers Do This To Dupe Florida Legislators?, has now been amended2 to include allegations from recent depositions.
Attorneys for the contractor took the deposition of a FKS adjuster who indicated in his recent deposition that he and other adjusters were instructed not to report findings of a cause of loss as part of their adjustment. The lawsuit allegations of the deposition indicated:
[O]n January 18, 2022, a field adjuster named Theodore Fiocati was deposed in a case involving UPC and FKS. . . . Mr. Fiocati testified that he was on a phone call in 2020 with representatives of FKS and UPC and other field adjusters for FKS, covering the ground covered in the above FKS Text. … He was told to avoid determining the cause of a loss and instead forward to the desk adjuster for further handling. . . . Mr. Fiocati confirmed that he followed the instructions. . . . The source of the discomfort at deposition was clear. The desk adjuster made observations unsupported by Mr. Fiocati’s own report. . . . Fiocati himself only indicated that he could not find damage to the roof in question because he had been instructed to do so. . .Indeed, Mr. Fiocati confirmed that he could not rule out that wind damaged the roof in question. . . . Mr. Fiocati confirmed that the ethical guidelines and procedures in such a circumstance would require him to make a determination benefiting the Insured (the opposite of what ultimately happened.) . . . Had he been permitted to act as a field adjuster absent instruction from FKS and UPC, he would have written an estimate for scope of damages; the ultimate finding by UPC and FKS was something that he disagreed with. . . . Crucially, Mr. Fiocati testified that he alone handled “probably say over 100” claims effected by the instructions above . . . Furthermore, other adjusters were given the same instructions that he was given. . . . In fact, the instructions to avoid finding a cause of loss, and instead refer the matter to the desk adjuster for determination, applied not just to “late reported claims,” but to claims that were timely reported but reopened.
Property insurance adjusters have two primary duties when adjusting a loss. First, investigate facts regarding coverage. Second, evaluate facts of valuation regarding the amount of the loss. If true, the insurer was instructing adjusters to ignore facts regarding whether wind damage was present and prevented them from writing amounts of that damage.
Another adjuster’s recent deposition was also noted in the amended complaint:
[O]n January 20, 2022, field adjuster Lari Piscitelli was deposed about yet another claim handled by UPC. . . . Mr. Piscitelli worked at the time for Mid-American Claims. He testified that he alone believed he handled some 150 – 200 claims for UPC through Mid-American Claims. . . . As with Mr. Fiocati through FKS, Mr. Piscitelli attended a meeting with UPC through Mid-American Claims where he, and all other field adjusters with Mid-American Claims handling any UPC claims, were instructed how not to document claims for UPC. (‘The Mid-American Online Meeting.’) At that meeting and thereafter, Mr. Piscitelli and other adjusters were instructed to in fact avoid doing their jobs:
We had a meeting at night and everybody was on the meeting and it was verbally discussed. I believe some people from UPC was there, but I can’t tell you exactly who was in the meeting. It was mostly adjusters, and it was at night and they basically said that they were going to deny everything for late reporting and not to write the word damage, say the word damage.
Mr. Piscitelli stated that he was instructed by UPC that ‘[t]hey were denying everything for late reporting. Just take pictures and send over a report.’
If these allegations are true, it would seem to be a set-up for UPC to deny almost all later reported claims under the pretext that either the damage was not caused by wind or that the insurer would be prejudiced because its adjusters could not make a determination. I wrote about this tactic in Has Your Insurance Company Denied Your Claim Because of Failure To Provide Prompt Notice?
Do not take a denial of your claim or an allegation of late notice as being gospel. It is amazing how little insurance company experts and adjusters say they can determine when asked ‘because of late notice, has your investigation be prejudiced?’ They start looking and acting like the Three Monkeys who see, hear, and speak nothing while conducting their investigation. They will claim all kinds of prejudice with lawyers and claims managers who are giving them seminars about how to do it.
This lawsuit seems to be proving that what I warn against is taking place on a grand scale. If true, many would think that our Florida insurance regulators should be conducting a major investigation into this insurer because hundreds of policyholders were harmed by this conduct, which is now supported with sworn testimony and actual text messages showing the scheme.
We will keep readers of this blog up-to-date about other filings in this federal case and if we hear anything about regulators following-up with their obligations to protect the public interest.
Thought For The Day
You must pursue this investigation of Watergate even if it leads to the president. I’m innocent. You’ve got to believe I’m innocent. If you don’t, take my job.
Richard M. Nixon
1 SFR Services v. United Prop. & Cas. Ins. Co., No. 8:22-cv-00109 [Amended Complaint] (M.D. Fla.).