An Example of Why Insurance Companies Are So Skeptical | Property Insurance Coverage Law Blog

In my recent presentation on ethics at California Association of Public Insurance Adjusters (CAPIA), emphasis was placed on the cornerstone of integrity. I emphasized the importance of doing the right actions, not only because of their results, but also because they are inherently honest and moral. This is essential to maintaining ethical and professional standards in our work. A critical point I raised was the tendency of individuals who engage in dishonest actions to rationalize their behavior. Some even argue that insurance companies’ wrongdoing justifies unethical reciprocal responses. To illustrate this point, I shared a slide quoting a maxim my mother often reiterated during my childhood: “Two wrongs never make a right.” This simple yet profound wisdom highlights the essence of ethical conduct in our professional lives.

I was thinking about it while reading a weird Order to show cause involving a federal court case in Arkansas:1

…United Fire is seeking sanctions over allegations that 4 Star attorneys and employees attempted to tamper with witnesses by having a witness avoid being subpoenaed in the case.

The Court is considering sanctions against Benjamin Doyle, Allen Satnes, Jonathan Kinder and 4 Star. The courts have the power to sanction the lawyers who appear before them (Mr. Doyle), the parties (4 stars) and the representatives of these parties (Mr. Satnes and Mr. Kinder)…

The Court is considering a series of sanctions. This range goes from no sanction to the most severe sanction: rejection of the 4-star complaint with prejudice. This range includes compelling evidence or claims, imposition of attorney’s fees and costs, fine or monetary penalty, referral to appropriate authorities to investigate any alleged crime, use of an adverse inference against 4 Star if the case goes to trial, and dismissal. of the 4 star complaint with prejudice. …At the moment, Mr. Doyle is the only lawyer subject to sanctions. If the Court determines that disciplinary action against Mr. Doyle is warranted with respect to his admission to the Western District of Arkansas Bar, that issue will be addressed at a separate time. If necessary, the Court will also refer any questions of attorney misconduct to the appropriate state bars.

Finally, the Court wishes to briefly address Mr. Doyle’s motion to withdraw. Mr. Doyle is seeking permission to withdraw because United Fire has named him as a fact witness in this matter, which creates a conflict of interest. Mr. Doyle also denies the allegations contained in the sanctions motion. According to Mr. Doyle, a formal complaint against him has been filed with the Arkansas Board of Professional Conduct, and he intends to respond to the allegations in that forum. The Court has “the power to address the conduct of attorneys in litigation without delegating such responsibility to state disciplinary mechanisms.”…The power and responsibility of the Court in this matter is not affected by the action or otherwise of the Arkansas Committee. The Court will not grant the motion to withdraw at this time.

THE request for sanctions from the insurance company has an affidavit that must be read to fully understand the scenario of what was allegedly said to prevent a witness from appearing at trial. He stated, in part:

4. On October 27, 2023, I spoke with Smith by telephone. Smith told me that an employee of the 4 Star, Allen Satnes (“Satnes”), paid him $2,100 in cash with the understanding that Smith would use the money to leave town with his family in an attempt to escape to WDTC’s subpoena for trial. . He also told me that 4 Star’s current attorney, Benjamin D. Doyle (“Doyle”), contacted him and told Smith to leave town for a while to avoid service and not to say no one where he was going. Smith said he had video recordings of his phone calls with Satnes and Doyle in which they discussed this arrangement.

5. On October 27, 2023, at 1:08 p.m., Smith texted me two videos that his wife recorded on his cell phone. The first video shows a phone conversation between Smith and Doyle about paying Smith to escape service in the case. The second video shows a telephone conversation between Smith and Satnes on the same subject.

Part of the transcript, if true, will condemn the entrepreneur and his lawyer:

BEN DOYLE: They didn’t do their job properly. If so, the only way they can get this evidence is through you, okay. And the only way to force you to testify is to receive a subpoena. They can’t subpoena you unless you’re in Fort Smith. So I don’t care where you go, 4 stars will pay for that. Go to Kansas City, go play, you can find a lake somewhere and go fishing. I don’t want you to tell me where you’re going to go. Honestly, I don’t care, but Jonathan wanted me to call you to make sure you’re not in trouble, that you haven’t done anything wrong. There is no problem. If you receive a subpoena, call Jonathan. But we’re trying to stop you from testifying at trial.

JONATHAN KINDER: You’ll find the money in cash.

A hearing was held on the matter this week. The court did not issue a decision.

In my recent presentation on ethics, I delved into the essence of professionalism, particularly emphasizing the importance of avoiding mistakes. A key point I discussed was the observation that insurance company adjusters and their attorneys often hastily label every mistake made by a public adjuster, contractor, or policyholder as an act intentional fraud. This quick turn to accusations can be problematic.

Given the number of cases of misconduct, such as Arkansas’, it is perhaps understandable why such skepticism has become a default position. This is similar to police officers working in troubled neighborhoods, where distinguishing between law-abiding citizens and criminals becomes a difficult task. However, it is disheartening to report such events. When such misconduct occurs, it invariably casts a shadow over all policyholders, restoration contractors, and their advocates. This fuels a cycle of increased skepticism among insurance adjusters and their attorneys.

This increased doubt affects the entire process, making it increasingly difficult to give policyholders the benefit of the doubt about their integrity – a presumption they rightly deserve. Such a climate of distrust makes it difficult for honest individuals to navigate the system and receive fair treatment. This reminds us that an unprofessional and unethical act not only impacts the immediate parties involved; This reverberates throughout the insurance industry, changing perceptions and complicating interactions for those who operate with integrity and professionalism.

Thought of the day

It takes 20 years to build a reputation and five minutes to ruin it. If you think about it, you will do things differently.

—Warren Buffett

1 4-star general company c. United Fire & Cas. Co.No. 2:22-cv-02036 (WD Ark. November 11, 2023).

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