Rigsby Sisters

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Kerri Rigsby and Cori Rigsby (Moran) are sisters who worked for eight years at the E.A. Renfroe Company and were managers overseeing catastrophe claims adjusters before their dismissal. The company is based in Birmingham, AL; but the sisters are from Mississippi and were dispatched to catastrophe sites. Through Renfroe, they were surrogates of State Farm tasked to help evaluate claims along the severely battered Mississippi Gulf Coast after Hurricane Katrina. As they visited numerous properties and reviewed many documents they became aware of instructions issued to engineering firms to alter reports. The sisters believed State Farm ignored or minimized wind damage to avoid payments – the company denies this. Over the course of several months, the sisters amassed thousands of pages of documents related to State Farm's activities. Eventually, their story went public when ABC's 20/20 show aired it in August 2006.

1 The Documents
2 20/20 Show
3 E.A. Renfroe
4 In Court
5 Results
6 Media Coverage
7 External links

[edit] The Documents

The sisters say they ultimately obtained about 15,000 pages of claims records. These documents were handed over on June 5, 2006 to the offices of Mississippi Attorney General Jim Hood and U.S. Attorney Dunn Lampton who were conducting criminal investigations. A couple weeks after the documents were turned over to Hood and Lampton another copy was presented to Richard Scruggs. Previously, Scruggs had worked with another whistleblower, Jeffrey Wigand, whose information led to a settlement with Big Tobacco.

[edit] 20/20 Show

The 20/20 broadcast of the the Rigsby sisters story brought new media attention to potential Katrina related fraud. In their interviews, Kerri and Cori were quoted as saying “A lot of people were cheated,” and they believed the alteration of documents and engineering reports was 'widespread.' The 20/20 piece also interviewed an unsatisfied policyholder. He stated it took three engineering reports to conclude the damage was only water, but he knew it was the third report because State Farm inadvertently sent him the two previous reports that concluded the damage was from wind and water – a protocol where State Farm would have had to make a payment.

The Rigsby sisters alleged this was not an isolated incident, but a widespread campaign by State Farm to pressure engineers to issue certain types of reports to reduce State Farm's liability. State Farm representatives in Bloomington, IL, the home office, say what the women describe would be contrary to the company's claims practices.

[edit] E.A. Renfroe

E.A. Renfroe, the company that contracted with State Farm Insurance Co., sued the Rigsby sisters on September 1, 2006. It alleged in its lawsuit, E.A. Renfroe & Co. Inc. v. Moran; No. 06-1752 (N.D. Ala.), that Cori and Kerri Rigsby broke the law when they turned over reams of internal State Farm records to attorney Richard Scruggs. Renfroe's lawsuit, filed in an Alabama federal court, accused the sisters of violating the Alabama Trade Secrets Act and breaching confidentiality agreements with the company. Renfroe asked a judge to order the Rigsby sisters to return the documents they presented Scruggs and to bar them from continuing to disclose information. Additionally, the sisters were requested to return the State Farm adjuster jackets they had worn for years.

E.A. Renfroe Company has worked with State Farm in the past. The firm was hired to do adjustments after a 1999 tornado struck residents in Oklahoma. A policyholder sued State Farm and charged the insurer with handling their claims in bad faith by hiring investigators who reported back that the property damage was not caused by the devastating storms. A jury found in favor of the plaintiff and awarded them $10 million in punitive damages. Watkins v. State Farm Fire & Casualty Co., No. CJ-2000-303 (Grady Co., Okla., Dist. Ct.).

[edit] In Court

[edit] November 2006

Attorney General Jim Hood's office argued the suit, E.A. Renfroe & Co. Inc. v. Moran, No. 06-CV-1752, should be suspended until the Mississippi Attorney General's office completed its criminal investigation into post-Katrina insurance claims practices. They claimed the government's case could be compromised if the civil case continued.

Insurance Commissioner George Dale: Dale launched his own investigation of the insurance industry and began with State Farm because they were the biggest insurance company in Mississippi. Dale claimed he was spurred on by policyholder complaints aired on local television.

[edit] December 2006

Federal Judge William Ackers Jr. requires the Rigsby sisters to return the documents to E.A. Renfroe.

[edit] January 2007

The Rigsby sisters testify for the Mississippi Attorney General before a Mississippi grand jury about what they saw while working as claims adjusters after Hurricane Katrina.

In Alabama, Judge Ackers orders the sisters to show why they should not be held in contempt of his order in December 2006 as they had yet to turn over the documents. Ackers also requires Scruggs and the Scruggs law firm to show why they should not be held in civil contempt.

In a court hearing on January 31st, E.A. Renfroe's attorney requested the Rigsby sisters and their representation face civil and criminal charges for their actions.

[edit] Results

In January 2007, State Farm Insurance settled with Richard Scruggs and the Scruggs Katrina Group over 640 different claims. One of the beneficiaries of the settlement was a Dr. Wesley McFarland. This man's claim was the final one reviewed by the Rigsby sisters and the one that ultimately pushed them to gather documents and contact Mr. Scruggs. Dr. McFarland initially had extensive evidence to show his home was damaged by wind, but State Farm declared the damages to be flood only. His information, coupled with the Rigsby sisters' actions, helped lead to the current criminal investigations against State Farm.

In February 2007, Mississippi state senators Dawkins and Williamson submitted a bill, Mississippi Senate Concurrent Resolution 574, to the state legislature commending the Rigsby sisters for their actions.

[edit] Media Coverage

[edit] External links

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