Legal Funding helps Champion of the Little Guy defend himself against State Farm and Big Insurance in Indiana, and State Farm is not happy.
Tomorrow, an Insurance Industry promoted bill (HB1340) sponsored by Indiana State Representatives Matt Lehman and Terri Austin will have a hearing in front of the Indiana House Financial Institutions Committee. The bill is a repeat of last year’s unsuccessful bill to regulate Legal Funding companies operating in Indiana out of business. State Farm and the other special interest groups for insurance, such as NAMIC, were vocal supporters last year, and will likely again appear to testify. Legal funding allows consumers to sell a property right – a small portion of a legal claim – so that they do not walk away from the fair value of their claim because of financial pressures. Insurance companies have used their lobbying power to preserve the status quo in an act of corporate cronyism. This tale explains that motivation.
So a little history on why insurance Goliath State Farm and its minions would be such vocal supporters of denying Hoosiers of access to this product may be warranted. Let me take you back to a 2006 Indiana hail storm and the story of an Indiana citizen who got in the crosshairs of State Farm by helping policyholders that were getting screwed. His name is Joe Radcliff, and he decided to hold State Farm accountable for its responsibility to pay for hail damage claims. The option to access Legal Funding, which State Farm is attempting to eliminate now through legislation, helped Radcliff defend himself from State Farm’s wrath and recover $17 million for the bad acts State Farm performed in its attempts to destroy him.
In April 2006, central Indiana suffered a large hailstorm that caused $1.3 billion in insured losses. State Farm, with nearly 30% of the Indiana homeowners market received almost 50,000 claims. State Farm rejected thousands of claims even though other companies were paying similar claims to neighboring property owners.
A contractor named Joe Radcliff sought to help these homeowners receive the roofing repairs they were entitled to. Noticing an alarming pattern of State Farm claim denials, Radcliff helped Indiana hail storm victims appeal their claim denials to the Indiana Department of Insurance.
State Farm denies hail claims but will accept vandalism claims from policyholders that will file charges!
State Farm continued to deny storm damage claims from policyholders electing to work with Radcliff. State Farm told certain of these denied policyholders that their hail claim they could still get their roofs repaired – but with a catch. Their coverage would kick in if they agreed to file vandalism claims and a police report against Radcliff since vandalism was also covered by their policies.
State Farm targets Radcliff, has him arrested
State Farm instigated Mr. Radcliff’s arrest on 14 felony counts by providing documents to authorities that excluded evidence in its possession that demonstrated his innocence. Its public affairs specialists promoted the arrest to the media and through hundreds of email blasts. State Farm investigators even circulated a crude drawing of Radcliff being raped in prison under the caption “Enjoy”. Prosecutors quickly dismissed all 14 counts.
Radcliff defends himself using Legal Funding
State Farm turned to the civil courts after criminal charges failed, and sued Radcliff for racketeering and insurance fraud. Legal funding allowed Radcliff to defend himself, prove that State Farm had defamed him by falsely accusing him of criminal conduct, and keep his small business out of bankruptcy. In June 2011, after a six-week trial and the testimony of 40 witnesses, the jury found in favor of Radcliff on his defamation claims and awarded him $14.5 Million, one of the largest defamation verdicts in United States history.
Verdict withstands review all the way up to Indiana Supreme Court (despite State Farm’s fight to overturn)
State Farm aggressively appealed the decision and attempted to obtain a new trial, but all of its efforts failed at each step of judicial review. An Indiana Appellate Court upheld the jury’s verdict, finding that Mr. Radcliff proved State Farm’s actual malice in defaming him and making knowingly false statements by clear and convincing evidence. State Farm’s appeal to the Indiana Supreme Court was denied in 2013, which force State Farm to pay Radcliff the jury’s award of $14.5 Million, plus $2.5 Million in accrued interest.
Without the help of legal funding, Radcliff would have never been to stand up to a giant like State Farm.
Legal funding allowed him to defend himself against State Farm’s outrageous charges and avoid complete financial ruin. But State Farm is not done fighting, and wants to use its political clout to make certain that others like Radcliff are unable to hold it similarly accountable in the future. State Farm has launched a national assault on legal funding through the legislative process, and pushed bills that would prevent citizens from accessing this critical financial option. Through such legislation, State Farm seeks to maintain its financial advantage over the average working class Indiana citizen that does not have the resources to confront State Farm for tis bad acts.
Ultimately, a champion of the little guy was able to obtain justice because he had access to legal funding. Stay tuned to see if State Farm is successful in its promotion of HB1340 in stripping that right away from citizens in the future.
The much more graphic details can be found here in the Indiana Appellate Court decision: State Farm Fire & Cas. Co. v. Radcliff, 987 N.E.2d 121, 137 (Ind. Ct. App. 2013), reh’g denied, trans. denied. For more information, see State Farm versus Radcliff