Northwest Indiana personal injury lawyer discusses a recent $14.5 Million defamation verdict against State Farm.
In the past I have written posts about State Farm tactics. Recently, I posted that State Farm took an unreasonable position against one of its insured's and the appellate court agreed that it acted unreasonably. In my experience and opinion, State Farm takes claims very seriously and sometimes its employees take claims as a personal affront and make personal decisions based on personality instead of business.
State Farm is the biggest boy on the block in writing property and casualty insurance. When State Farm sinks its teeth into a vendor, roofer, doctor, clinic, etc., the small business, most of the time, cannot spend the money that it takes to withhold the offensive posture.
In the recent decision of State Farm v. Radcliffe, the Indiana Court of Appeals upheld a $14.5 million defamation verdict. The opinion is 64 pages and you should probably spend some time and read it – to see how State Farm acted in this matter.
Just to understand a defamation case, the person alleging defamation has to prove “actual malice” by a higher civil standard that is close to beyond a reasonable doubt, in a criminal setting. A defamatory statement is a statement that tends to harm a person's reputation by lowering the person in the community's estimation.
There was a large hail storm in Central Indiana. About 7000 State Farm Insurance policyholders made claims for roof damage and State Farm systematically denied the claims. A number of roofing companies put out ads saying they would not work on these homeowners' houses. Radcliffe and his company took on State Farm. There were complaints filed with the Department of Insurance, newspaper and TV reports, and a class action lawsuit. Radcliffe marketed that he would take on State Farm.
State Farm started an investigation against Radcliffe. They referred the matter to NICB (National Insurance Crime Bureau). NICB referred the matter to local law enforcement and Radcliffe was charged with 14 felony counts. The felony counts were dismissed and Radcliffe entered a diversion program for 1 misdemeanor.
State Farm filed a civil action against Radcliffe, going for the knockout punch. Radcliffe filed a counterclaim for defamation. The case was tried for six weeks. State Farm lost its case and the jury awarded Radcliffe and his company $14.5 million finding that State Farm defamed him.
The Indiana Court of Appeals reviewed the record and finding for Radcliffe noted the following:
The evidence shows that Radcliff was trying to help State Farm policyholders at the very same time that State Farm was receiving negative press for denying claims arising from the April 2006 hailstorm. It was reasonable to assume that Radcliff and CPM were targeted not because of fraudulent activity but rather because of their work on behalf of State Farm clients. This work included Radcliff reporting State Farm to the Department of Insurance, meeting with rtv6's Rafael Sanchez about State Farm, posting signs in and around Marion County that CPM would fight State Farm claims—which State Farm was upset about—and having the homeowners sign powers of attorney so that CPM could deal directly with State Farm. Although other contractors placed newspaper ads stating that they would not work with homeowners who had State Farm as their insurance, CPM would. And all of this caught the eye of State Farm.
Additional evidence of State Farm's ill will was found in the fact that State Farm did not heed the NICB's instructions to turn over its entire claim file, even if that meant including materials that undercut its suspicions of insurance fraud. Instead, State Farm removed materials that showed hail damage—not vandalism—to the homeowners' roofs.
Shortly after Radcliff was arrested, State Farm tried to capitalize on his arrest by issuing the following public statement to rtv6:
“We are cooperating with and assisting the authorities in their investigation. As the nation's largest property and casualty insurance company, State Farm is committed to helping law enforcement in developing and implementing programs that help curb crimes like fraud because it impacts our business and our customers.”
A few days after the arrest, a SF employee visited Radcliffe's wife's Facebook page and saw a picture that someone posted of Radcliffe being raped behind bars. The SF employee forwarded the picture to NICB investigator and said “enjoy.”
In order to uphold the verdict, the appellate court reviewed whether Radcliffe proved that State Farm acted with actual malice. The court found:
SF knew there was hail damage to the roofs of some of the homes before Radcliffe ever became involved.
Independent contractors, engineers as well as Radcliffe found hail damage on the homes as opposed to vandalism. State Farm withheld this evidence from NICB so the Prosecutor's office did not know of this evidence before it filed criminal charges against Radcliffe.
State Farm tried to talk some homeowners into filing vandalism charges against Radcliffe.
These events were occurring while State Farm was under intense pressure from the media, the Department of Insurance,
Even though this case is a long read, if you have to deal with State Farm you may want to read the decision, you will be amazed.