AG files separate State Farm suit per high court ruling

One day after the state Supreme Court said he couldn't piggyback on someone else's lawsuit against an insurance company, Oklahoma Attorney General Gentner Drummond filed his own lawsuit Wednesday against State Farm Fire and Casualty Co. to enforce state racketeering law.

Filed in Cleveland County District Court, the 21-page petition alleges State Farm employed an internal program called the Hail Focus Initiative that was designed to reduce or deny roof replacement payments for legitimate covered losses caused by storms.

"This case is more than individual claim disputes," Drummond said in a news release. "The allegations describe a corporate scheme that threatens the integrity of Oklahoma's insurance marketplace and undermines public confidence in an industry families rely on when disaster strikes."

The claims are asserted under the Oklahoma Consumer Protection Act and the Oklahoma Racketeer-Influenced and Corrupt Organizations Act, as well as common-law claims for civil conspiracy and unjust enrichment.

The filing comes after the Oklahoma Supreme Court on Tuesday said Drummond could not join a bad-faith claim lawsuit previously filed by one of State Farm's policy holders.In its ruling, the court said Drummond's attempt to intervene in the case wrongly expands the scope of the original lawsuit.

"Such expansion is impermissible under Oklahoma law," the ruling said. The decision overturns a lower court ruling in December, during which Oklahoma District Judge Amy Palumbo permitted Drummond to join the policy holder lawsuit.

"It is unacceptable that Oklahomans are paying rising homeowners insurance premiums yet receiving less protection in return," Drummond said. "Inflation and weather do not explain, let alone justify, the widening gap between what Oklahomans pay and what they receive.

"This new action will prevent State Farm from continuing to delay the matter with procedural posturing."

State Farm sent the following response when asked to comment on Drummond's lawsuit:

"We are pleased with the Oklahoma Supreme Court's unanimous decision on this matter. The Attorney General's lawsuit does not change the facts. State Farm remains committed to helping customers recover after storms, providing access to insurance, and working constructively with the regulator to benefit Oklahoma consumers. Over the past two years, State Farm has paid more than $1 billion to Oklahoma customers for wind and hail damage to their homes and property. We fairly and diligently evaluate every claim and pay what we owe under the policy based on the facts and coverage purchased. Unfortunately, the continued focus on these allegations appears driven more by political motivations than by the facts or the needs of Oklahoma consumers."

curtis.killman@tulsaworld.com