Insurance attorney discusses Campbell case, and how State Farm’s “deceit and cheating” make it not the good neighbor you think it is
This week is going to be State Farm week for the Michigan Auto Law blog. Let’s start with the obvious: State Farm Mutual Automobile Insurance Company did not become one of the largest — and the most profitable — auto insurers in the country because of its charm, good looks and comforting bedside manner.
And based upon my own personal experience as an insurance lawyer, it certainly hasn’t been from how it treats its own State Farm customers when they’re injured in automobile accidents either.
State Farm got to where it is because of its willingness to throw very sharp elbows and its ruthless business practices – even when it comes to its own customers.
And I didn’t make up that last point. It was made by the Utah Supreme Court in an opinion called Campbell v. State Farm Mutual Automobile Insurance Company. In Campbell, an at-fault State Farm insured (State Farm customer) sued the company for “bad faith” after State Farm’s unwarranted refusal to settle the exposed insured customer to more than $100,000 in personal liability.
Among the many bombshell revelations that came out during the case, the Utah Supreme Court highlighted the following instances of “reprehensible conduct” and “egregious and malicious behavior” on State Farm’s part:
- Mad dog defense tactics: “State Farm actually instructs its attorneys and claim superintendents to employ ‘mad dog defense tactics’ – using the company’s large resources to ‘wear out’ opposing attorneys by prolonging litigation, making meritless objections, claiming false privileges, destroying documents, and abusing the law and motion process.”
- Deceit and cheating: “State Farm repeatedly and deliberately deceived and cheated its customers …”
- Fraudulent practices toward minorities, women and the elderly: “State Farm’s fraudulent practices were consistently directed to persons – poor racial or ethnic minorities, women, and elderly individuals – who State Farm believed would be less likely to object or take legal action.”
- Concealing profit scheme: “State Farm engaged in deliberate concealment and destruction of all documents related to [its] profit scheme.”
- Keeps no records: “State Farm, as a matter of policy, keeps no corporate records related to lawsuits against it, thus shielding itself from having to disclose information related to the number and scope of bad faith actions in which it has been involved.”
- Harassing and intimidating claimants: “State Farm has systematically harassed and intimidated opposing claimants, witnesses, and attorneys.”
Tomorrow, I’ll discuss how deceit, harassment, and intimidation are an important part of State Farm’s business model – and an important source of profits.
And on Thursday, I will be discussing what I see for State Farm’s future.