Engineer: (Katrina) Reports altered, name forged

'They took out whole exhibits'

April 11, 2006

Professional engineer James K. "Ken" Overstreet said his assessments of property damaged by Hurricane Katrina were altered without his permission and, in several cases, his signature was forged on documents insurance companies used to minimize or deny policyholder claims.

Overstreet worked as a contractor for S&B Infrastructure. In turn, S&B contracted with Rimkus Consulting Group Inc. to supply damage assessments to insurance companies. S&B, he said, parroted orders from Rimkus.

"If they could get by with changing the wind to surge, they would do it," said Overstreet, who has talked with the state Attorney General's Office in connection with a Hurricane Katrina insurance-fraud investigation. "If you had affidavits in there where people saw houses blowing down, sometimes they'd just take those out entirely. They took out whole exhibits."

The Sun Herald obtained copies of altered reports from the Merlin Law Group, which has subpoenaed the records for several lawsuits filed in Harrison County against Houston-based Rimkus, Rimkus employees managing Hurricane Katrina work, State Farm Fire & Casualty Co., Clarendon National Insurance Co. and the company adjusting Clarendon claims, CIG Group Inc.

Because of state Attorney General Jim Hood's ongoing investigation, representatives of S&B and State Farm said the companies will not comment on the allegations.

Rimkus attorney David Ward said the company has not been presented with any lawsuits or documentation about the lawsuits. "We have no specific information from anybody that says there was anything improper done on a specific file. Once we have that, we'll be happy to respond in particular."

Ward, who has represented Rimkus about 15 years, said the company follows detailed policies and procedures to produce its reports and other documents.

Because of Hurricane Katrina's unprecedented storm surge, insurance companies have engaged engineering firms to separate wind damage, which they are obligated to pay, from destruction by water, which they are not.

Chip Merlin, a Florida lawyer who has specialized in lawsuits again insurance companies since the 1980s, said he is not surprised by the altered reports his firm has seen.

"Many times, engineers themselves are involved with doctoring the report," said Merlin, whose previous cases in other states did not involve Rimkus.

"In this case, you have an innocent engineer writing his own opinion and then somebody, for some reason, changing that person's opinion on paper. That's why it's pretty unique."

From state to state, disaster to disaster, Merlin sees an overriding theme: "Time after time, we find the insurance company, instead of looking for ways to pay the full amount, deviously engineering ways to pay less than what's owed under the policy after the loss happens."

For their part, insurance companies maintain they investigate each claim and pay customers what is owed under their policies.

Overstreet said the engineering firms changed his reports without consulting him, even removing his references to tornadoes when he found evidence of them.

State regulations require that an engineer prepare, review in depth or directly supervise the work he signs and affixes with his professional seal. Overstreet said Rimkus engineers whose signatures and seals are affixed to several of his reports were not involved in the damage assessments and didn't review the work with him.

Overstreet said his signature was forged on the altered reports.

"I don't think there was any restriction on the extent to which they could change the report," Overstreet said. " I was told we didn't have any control over how the reports got changed. It was like it was almost none of my business how they got changed."

Overstreet said he saw a pattern to the damage investigations: when winds and surge battered property, blame the surge.

Such was the case with a Rimkus report on the Long Beach home of James "Bud" Ray, who thought that he was fully covered for hurricane losses when he secured a National Flood Insurance policy and a homeowners policy for wind damage.

His flood claim was paid through the National Flood Insurance Program, but he's still fighting for full reimbursement from Clarendon for wind damage. Clarendon contracted with CGI to adjust its claims.

In September, CGI wrote Ray, saying he might not be entitled to coverage because early reports indicated the storm surge flooded or washed away many homes, but the company would investigate the claim.

Overstreet completed a report on the Ray property in December. He concluded: "The home had been destroyed by a combination of wind gusts, tornadoes and wind-driven storm surge."

He added: "Due to the high incidence of snapped and uprooted trees, and according to eyewitness accounts, winds much higher than those considered to be "sustained" likely contributed to the structural damage to Mr. Ray's house."

A second Rimkus report in February omitted Overstreet's conclusions and instead said, "The storm surge associated with Hurricane Katrina destroyed the portion of the residence above the concrete foundation slab."

Ray had collected sworn eyewitness accounts of the devastation.

Overstreet's report included the eyewitness accounts and a map showing where each lived, along with a photo of Ray and one of the eyewitnesses. Those items were not included in the February report. Overstreet said his name was forged on the report as a consultant, with another engineer's signature and seal affixed.

Meanwhile, Ray spent $15,000 of his own savings on weather, engineering and other professional reports to buttress his claim that wind tore up his waterfront home before the water arrived. He kept CGI representatives abreast of his expert information, eventually securing $500,000 on a policy valued at more than $900,000.

After learning about the altered reports, he decided a lawsuit was his only recourse. His attorneys argue that his policy limits should be paid, and punitive damages levied against Clarendon and CGI for acting in bad faith.

Clarendon representatives did not return calls to comment, while a CGI spokesman said the company had not seen the lawsuit.

Overstreet summed up the situation:

"You're not supposed to get somebody else to figure it out and do all the work and then stamp it.

"The person doing the stamping ought to be the person that saw the documents and did the work.

"I hate to say that about a company I was employed by, but its devastating for people who rely on it as an honest opinion."

Copyright © 2006

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