US judge rejects BP’s bid to decrease $13.7bn fine for 2010 Gulf of Mexico oil spill

 FEBRUARY 20, 2015

A US judge has rejected BP's bid to reduce the maximum civil penalty of $13.7bn it could face for the Gulf of Mexico oil spill in 2010. 

US District Judge Carl Barbier agreed with the federal government claim that BP has to pay a fine of $4,300 per barrel, rejecting the company's appeal to pay $3,000 per barrel as per the country's Clean Water Act.

BP spokesman Geoff Morrell was quoted by Reuters as saying that the company disagrees with the decision and is considering legal options.

BP has already paid more than $28bn in damages and costs associated to the oil spill, which killed 11 people and spread oil across seafood grounds and coastal beaches.

The company contracted Transocean's Deepwater Horizon drilling rig to develop Macondo well, located in the Gulf of Mexico.

Earlier this month, the Texas Supreme Court rejected BP's claim for $750m worth of coverage under Transocean's insurance policies to help pay the damages related with the oil spill. 

The British oil and gas firm paid hundreds of millions of dollars to the identified victims of the spill through multiple businesses between August 2012 and October 2013. 

The well discharged millions of barrels of oil into the Gulf of Mexico, before eventually being capped in July 2010 and permanently sealed in the following September.

IOWA DNR INVESTIGATES 100-GALLON FUEL SPILL ON FROZEN DES MOINES RIVER DUE TO A RELEASE FROM A GAS STATION THAT REACHED A STROM DRAIN AND THEN THE RIVER

FEBRUARY 20, 2015

ESTHERVILLE, IOWA (AP)

Iowa Department of Natural Resources officials say about 100 gallons of fuel has pooled on top of a frozen section of the Des Moines River.

DNR spokesman Kevin Baskins says E-85 fuel overflowed Friday as a tank at an Estherville service station was being filled. He says the fuel reached a nearby storm sewer and flowed to the West Fork of river in northern Iowa.

Officials say they began cleaning the spill atop the ice and placed a barrel at the end of the storm sewer pipe to collect any fuel that continues to flow through and keep it from reaching the river.

Baskins says the DNR doesn't expect significant environmental impact from the spill.

E-85 is an abbreviation for an ethanol fuel blend of 85% denatured ethanol fuel and 15% gasoline or other hydrocarbon by volume, although the exact ratio of fuel ethanol to hydrocarbon can vary considerably while still carrying the E85 label.

ANATOMY OF AN ALTERED ENGINEERING REPORT DURING SUPERSTORM SANDY INSURANCE CLAIM INVESTIGATION: THE BAD, THE UGLY AND THE REALLY UGLY

Most readers of this blog are aware of the issues surrounding altered engineering reports in the wake of Superstorm Sandy. Often attorneys get a gut feeling about a case and believe that the other side may be trying to hide the ball. This has been true in many of our Sandy cases. On one such case, I discovered today that my gut was correct.

As a result of W. Craig Fugate’s December 5, 2014 directive to the WYO carriers, today I received the draft engineering report on one of my cases. The draft report states (in part):

1) The physical evidence observed at the property indicated that the subject building was structurally damaged by hydrodynamic forces, hydrostatic forces, scour or erosion of the supporting soils, or buoyancy forces of the floodwaters associated with the flood event of October 29, 2012.

5) The air conditioning unit on the south side of the building and the heating unit in the crawl space were inundated by flood water and replacement is required.

6) Plumbing pipe insulation in the crawl space was damaged by floodwaters.

7) In order to repair the damage to the building caused by floodwaters associated with the flood event of October 29, 2012, we recommend that the foundation under the foyer area be replaced. The floor of the foyer and part of the kitchen floor will need to be removed and replaced to permit access to repair the broken and damaged floor supports. Approximately 45 linear feet of foundation wall and 200 square feet of flooring will require replacement. All repair work shall be performed by qualified contractors and in accordance with all applicable state and local building codes and standards.

The records indicate that the report was submitted to US Forensic by the inspecting engineer and was then altered by a different US Forensic engineer to state:

1) The physical evidence observed at the property indicated that the subject building and foundation system were not structurally damaged by hydrodynamic forces, hydrostatic forces, scour or erosion of the supporting soils, or buoyancy forces of the floodwaters associated with the passage of Hurricane Sandy on October 29, 2012.

2) The physical evidence observed at the subject property indicated that the cracks in the interior finishes, leaning foundation walls and supports posts and the uneven floor surfaces within the building occurred prior to the subject flood event and were the result of differential movement of the building and foundation that was caused by long-term differential movement of the supporting soils at the site and long-term deflection of the floor framing components.

The second version, as altered by the US Forensic engineer, became the final version sent to the insured. Until today the insured did not know there was an initial version of the report which would have provided coverage under their flood insurance policy.

The moral of the story is, keep digging. I would not recommend settlement of any flood insurance claims where there are engineering issues unless and until you can be assured that the report you received has not been altered in any way.

http://www.propertyinsurancecoveragelaw.com


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http://metroforensics.blogspot.com/2015/02/insurance-executive-with-wright-flood.html

INSURANCE EXECUTIVE WITH WRIGHT FLOOD PLEADS FIFTH OVER ALTERED REPORTS DURING SUPERSTORM SANDY LITIGATION HEARING

FEBRUARY 19, 2015

(Bloomberg) -- The Federal Emergency Management Agency is working to settle lawsuits by hundreds of Hurricane Sandy victims who challenged denials or alleged underpayments of flood insurance claims.

Brad Kieserman, deputy associate administrator for insurance at FEMA, disclosed the settlement talks during a break in a court hearing Wednesday over whether an insurer, Wright National Flood Insurance Co., concealed from a homeowner the existence of conflicting reports over damages.

Private insurers working in partnership with FEMA’s National Flood Insurance Program have come under scrutiny over allegations they denied or rejected damage claims based on falsified reports. About 1,500 cases over flood claims from the devastating 2012 hurricane are pending in New York and New Jersey courts. FEMA may also review settlements with homeowners with disputed payments who didn’t sue, Kieserman said.

“We are going to consider all of them,” he said.

Separately, state law enforcement agents on Wednesday executed a search warrant at the Uniondale, New York, office of HiRise Engineering PC, according to Liz DeBold, a spokeswoman for New York Attorney General Eric Schneiderman. The firm did work for Hartford Financial Services Group Inc., which also participated in the FEMA program.

“HiRise has a fifteen-year history of ethical business practices and supports FEMA’s initiative to resolve all the outstanding Hurricane Sandy claims,” Joe Celentano, the company’s president and chief executive officer, said in a statement. “We are cooperating to the fullest extent possible with all parties in an effort to address and resolve the issues that have been raised.”

Long Beach

Wednesday’s hearing in federal court in Brooklyn, New York, centered on allegations by Deborah Ramey, who said a rental property she owned in Long Beach was severely damaged by the flood yet falsely described as having had long-term damage by an engineer working on behalf of the Wright Flood.

The engineering firm, U.S. Forensic LLC, produced conflicting reports about damage to Ramey’s home, according to evidence at an earlier proceeding. After an initial engineering report found her home was heavily damaged by the storm, a later report concluded much of the loss was due to the age of the roughly 80-year-old property.

In November, U.S. Magistrate Judge Gary Brown said he feared there may be conflicting reports in many other flood insurance cases, and hundreds of homeowners are now searching for evidence that similar tactics were used to deny their Sandy-related claims.

In court, Brown is weighing whether to penalize Wright Flood and a law firm that represented it and other insurers. Representatives from the Metairie, Louisiana-based firm, Nielsen Carter & Treas LLC, didn’t attend the hearing, and a phone call wasn’t immediately returned.

Takes The Fifth

During the proceeding, Jeff Moore, who was Wright Flood’s vice president of claims when Ramey was disputing her claim, refused to answer questions posed by her lawyers, citing his Fifth Amendment right under the U.S. Constitution not to incriminate himself.

Dolores Glass, a spokeswoman for St. Petersburg, Florida-based Wright Flood, declined to comment on Wednesday’s hearing. A call to U.S. Forensic after regular business hours wasn’t immediately returned.

Other insurers participating in the FEMA program, including affiliates of Travelers Cos. and Hartford Financial, have also been accused by homeowners in separate lawsuits of rejecting or underpaying claims based on falsified reports.

Hartford has denied allegations raised in a homeowner suit and said it arranged for a new engineering review following accusations that a report was improperly altered, Thomas Hambrick, a spokesman for the insurer, said in a statement. The Hartford suspended use of the engineering firm at issue, he added.

Matt Bordonaro, a spokesman for New York-based Travelers, declined to comment on settlement talks with FEMA.

Curtail Hearing

Last year, Nielsen Carter was penalized for failing to turn over a draft report and trying to curtail a hearing on the reports. Ramey’s lawyers have said they may seek additional sanctions if the firm is found to have engaged in a cover-up.

Partner Gerald Nielsen argued at a December hearing that the earlier penalties were unfair, that the insurer did nothing wrong and that the engineers had engaged in an appropriate “peer review” process to come to the final conclusion for the report.

“We did not willfully violate this order,” he told U.S. District Judge Joseph Bianco in an appeal of sanctions issued by Brown. “Wright Flood did nothing wrong.”

Bianco upheld the sanctions.

Nielsen Carter has stepped down as counsel for insurers and been replaced in cases pending in federal courts in Brooklyn and in Central Islip, New York. The firm continues to represent insurers in Hurricane Sandy-related cases in New Jersey, according to lawyers for the homeowners.

The case is Raimey (Ramey) v. Wright National Flood Insurance Company, 2:14-cv-00461, in U.S. District Court, Eastern District of New York (Central Islip).

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INSURANCE EXECUTIVE PLEADS FIFTH OVER ALTERED REPORTS DURING SUPERSTORM SANDY HEARING

Catastrophes breed controversies. Superstorm Sandy has a raging one involving altered engineering reports. Yesterday, Jeff Moore, a flood insurance executive with one of the largest National Flood Insurance participating insurers, pleaded the Fifth Amendment when asked questions regarding those altered reports. As reported by Christie Smyth of Bloomberg:

In November, U.S. Magistrate Judge Gary Brown said he feared there may be conflicting reports in many other flood insurance cases, and hundreds of homeowners are now searching for evidence that similar tactics were used to deny their Sandy-related claims.

In court, Brown is weighing whether to penalize Wright Flood and a law firm that represented it and other insurers. Representatives from the Metairie, Louisiana-based firm, Nielsen Carter & Treas LLC, didn’t attend the hearing, and a phone call wasn’t immediately returned.

During the proceeding, Jeff Moore, who was Wright Flood’s vice president of claims when Ramey was disputing her claim, refused to answer questions posed by her lawyers, citing his Fifth Amendment right under the U.S. Constitution not to incriminate himself.

I cannot remember an insurance company vice president of claims ever pleading the Fifth Amendment regarding insurance claims conduct. But, the refusal of flood WYO insurers and their attorneys to look into allegations of altered engineering reports and changed estimates of damage has been common place in Superstorm Sandy claims disputes.
Louisiana attorney John Houghtaling filed a letter with the New York federal court last week describing how long Jeff Moore and his attorneys refused to turn over the "draft" reports before Federal Magistrate Gary Brown stopped the practice last November:

In August of 2014, Plaintiff Liaison Counsel requested a meeting with Defense Liaison Counsel, Nielsen Carter & Treas (hereinafter NCT), to discuss the concern of fraudulent engineering reports in Hurricane Sandy. A face to face meeting was set on August 11, 2014 between undersigned, Brian Houghtaling, and NCT partners, John Carter and Bill Treas. At the meeting undersigned expressed that the expert reports upon which NCT were relying were produced by the same individuals behind fraudulently changed engineering reports in Katrina. NCT did not respond to our concerns and on Thursday, September 25, 2014, the parties entered mediation on the Ramey case. Jeff Moore attended the mediation and made statements at that mediation. Without disclosing these statements, the mediation ended with a dispute over defendant's compliance with the CMO.

WYO insurers are still not being transparent about how they determined amounts owed to policyholders. They still are not looking into—and refusing requests for the existence of—altered estimates. Every claim has an adjuster's estimate. If FEMA really wants to find the extent of shenanigans going on in its property insurance claims, it should look to see how the claims estimates were made and finalized. All of us in the property claims business know this and it does not take a rocket scientist to figure out why WYO insurers and their attorneys are refusing to look into this aspect of their claims handling.

If FEMA is serious about claims honesty and transparency, FEMA's Craig Fugate and Brad Kieserman will immediately require their WYO insurer to turn over all draft, changed, and altered estimates--with relevant emails and memos—which may explain the reasons for the alterations. We'll see if their actions match the words in the letters calling for transparency.

Source: http://www.propertyinsurancecoveragelaw.com

 

INSURANCE EXECUTIVE PLEADS FIFTH OVER ALTERED REPORTS DURING SUPERSTORM SANDY HEARING

Catastrophes breed controversies. Superstorm Sandy has a raging one involving altered engineering reports. Yesterday, Jeff Moore, a flood insurance executive with one of the largest National Flood Insurance participating insurers, pleaded the Fifth Amendment when asked questions regarding those altered reports. As reported by Christie Smyth of Bloomberg:

In November, U.S. Magistrate Judge Gary Brown said he feared there may be conflicting reports in many other flood insurance cases, and hundreds of homeowners are now searching for evidence that similar tactics were used to deny their Sandy-related claims.

In court, Brown is weighing whether to penalize Wright Flood and a law firm that represented it and other insurers. Representatives from the Metairie, Louisiana-based firm, Nielsen Carter & Treas LLC, didn’t attend the hearing, and a phone call wasn’t immediately returned.

During the proceeding, Jeff Moore, who was Wright Flood’s vice president of claims when Ramey was disputing her claim, refused to answer questions posed by her lawyers, citing his Fifth Amendment right under the U.S. Constitution not to incriminate himself.

I cannot remember an insurance company vice president of claims ever pleading the Fifth Amendment regarding insurance claims conduct. But, the refusal of flood WYO insurers and their attorneys to look into allegations of altered engineering reports and changed estimates of damage has been common place in Superstorm Sandy claims disputes. 

Louisiana attorney John Houghtaling filed a letter with the New York federal court last week describing how long Jeff Moore and his attorneys refused to turn over the "draft" reports before Federal Magistrate Gary Brown stopped the practice last November:

In August of 2014, Plaintiff Liaison Counsel requested a meeting with Defense Liaison Counsel, Nielsen Carter & Treas (hereinafter NCT), to discuss the concern of fraudulent engineering reports in Hurricane Sandy. A face to face meeting was set on August 11, 2014 between undersigned, Brian Houghtaling, and NCT partners, John Carter and Bill Treas. At the meeting undersigned expressed that the expert reports upon which NCT were relying were produced by the same individuals behind fraudulently changed engineering reports in Katrina. NCT did not respond to our concerns and on Thursday, September 25, 2014, the parties entered mediation on the Ramey case. Jeff Moore attended the mediation and made statements at that mediation. Without disclosing these statements, the mediation ended with a dispute over defendant's compliance with the CMO.

WYO insurers are still not being transparent about how they determined amounts owed to policyholders. They still are not looking into—and refusing requests for the existence of—altered estimates. Every claim has an adjuster's estimate. If FEMA really wants to find the extent of shenanigans going on in its property insurance claims, it should look to see how the claims estimates were made and finalized. All of us in the property claims business know this and it does not take a rocket scientist to figure out why WYO insurers and their attorneys are refusing to look into this aspect of their claims handling.

If FEMA is serious about claims honesty and transparency, FEMA's Craig Fugate and Brad Kieserman will immediately require their WYO insurer to turn over all draft, changed, and altered estimates--with relevant emails and memos—which may explain the reasons for the alterations. We'll see if their actions match the words in the letters calling for transparency.

Source: http://www.propertyinsurancecoveragelaw.com

When comes to money, everything is secondary: people will lie, defraud, go to wars, blackmail, extort, prosecute, and so on, and so on.  This has been going for as long humans invented the stuff.