MISSION VIEJO, Calif., Aug. 31, 2015 /PRNewswire/ -- Evangeline Grossman of Shernoff Bidart Echeverria Bentley LLP filed a lawsuit on behalf of Gregg and Cindy Comey, accusing State Farm, ServiceMaster (SERV) and Servpro of false promises, negligence, breach of contract and bad faith.
The Comeys had a water loss on March 7, 2013. It occurred in the upstairs bathroom and by the time the family arrived home at the end of a long day water was raining through the ceiling and the entire downstairs was flooded.
The Comeys contacted State Farm's 24 hour call center and were referred to Servpro. The Comeys were told Servpro was independent from State Farm; screened and qualified; would not be paid until work was completed to their satisfaction and that the services came with a five-year warranty. The result of State Farm's misrepresentations was mold contamination and gross underpayment of their claim. Mrs. Comey is severely disabled; Mr. and Mrs. Comey's son is a toddler and their daughter a teenager. The family has suffered terribly and they have a shocking story to tell.
Sixty percent of all State Farm claims arise out of residential water losses. These losses are nationwide and they are a huge expense for State Farm. Consequently, in 2008 State Farm launched the "Premier Service Program" and entered into a contractual relationship with national dry out companies ServiceMaster and Servpro to service its policyholders.
The Premier Service Program is a money saving tool for State Farm and a money making tool for its service providers ServiceMaster and Servpro. ServiceMaster and Servpro agree to complete the scope of dry out and demolition work approved by State Farm at a price determined by State Farm. In exchange, State Farm sends continuous work to ServiceMaster and Servpro. State Farm achieves its goal of limiting the scope of loss and paying less then what is due and owing; ServiceMaster and Servpro achieve their goal of receiving continuous work and income on a national basis from the largest property and casualty insurance company in the United States.
Every State Farm insured, including the Comeys, that report a water loss are advised of State Farm's Premier Service Program and offered either ServiceMaster or Servpro to perform water dry out.
Thousands of policyholders decide to participate in the Premier Service Program because they trust State Farm, are promised ServiceMaster and Servpro are independent, are promised ServiceMaster and Servpro are screened and qualified, are promised State Farm will not pay until work is completed to the insured's satisfaction and are promised that the services come with a five year warranty.
The issue in the Comey case is two-fold. State Farm not only misrepresented repeatedly that ServiceMaster and Servpro are independent but also relied on its misrepresentation to not pay the Comey's when their home became contaminated with mold. State Farm's characterization of ServiceMaster and Servpro as "independent" service providers is untrue and demonstrates an intentional, institutional manipulation of its policyholders.
To be "independent" a company must be free from outside control (State Farm controls the scope and cost of repairs it will authorize for payment); not dependent on another's authority (State Farm must approve the work before it commences and throughout the dry-out); not dependent on another for livelihood (State Farm sends continuous and voluminous business to the service providers on a national basis) and not connected with another or with each other (State Farm has a contractual relationship with both ServiceMaster and Servpro).
State Farm saves money if policyholders' homes are not dried out properly. A thorough dry out requires substantial demolition and raises the costs of repairs. State Farm's insurance policy limits mold benefits to $5,000. It is cheaper for State Farm to pay a mold claim then it is for it to pay the thorough dry out of a water loss.
It is the Comeys' hope that they can make a difference and prevent State Farm, ServiceMaster and Servpro from treating other policyholders in such a malicious way.
The case is Greg and Cindy Comey v. state Farm, Servpro, ServiceMaster, Orange County Superior Court Case No. 00745930-CU-IC-CJC.
About Shernoff Bidart Echeverria Bentley LLP
Shernoff Bidart Echeverria Bentley LLP leads the nation in protecting policyholders from insurance company abuse. The firm has been protecting the rights of insurance consumers, both individuals and businesses, for 40 years after having set the legal precedent requiring insurance companies to act in good faith.
SOURCE Shernoff Bidart Echeverria Bentley LLP