A federal judge in N. Y. is crack- ing down on an engineering firm that tried to cover up losses caused by Superstorm
Sandy, reports Bloomberg Businessweek.
U.S. Magistrate Judge Gary Brown was
reviewing a dispute over damage suffered by homeowners in Long Beach,
N. Y., when he discovered the fraud.
According to Businessweek, Florida-
based insurer Wright National Flood
Insurance sent an employee from U.S.
Forensic, an engineering firm retained by
Wright, to the hurricane-damaged house.
The employee wrote a report concluding
that the home had been damaged beyond
repair. After merely reviewing a few pho-
tographs, a second engineer for U.S. Fo-
rensic rewrote the report to say the home
hadn’t been damaged at all.
The process, called a “peer review” by
U.S. Forensic, was concealed from the
homeowners and was only discovered
by chance, Brown told Businessweek.
Lawyers for Wright indicated the peer
review process may have affected hun-
dreds of Sandy claims, the judge adds.
Brown also says the firm’s lawyers at-
tempted to prevent the revelation of the
fraud in a court hearing last month,
violating their obligation to comply
with court orders, prolonging the liti-
gation, imposing unnecessary costs on
the plaintiffs, and unfairly delaying the
payment of a legitimate claim, reports
Judge Brown has ordered Wright to
rely only on the initial engineer’s report,
and ordered its lawyers to reimburse
the plaintiffs for their legal expenses
related to the concealment. On top of
that, Brown is instructing all defendant
insurance companies in Sandy cases to
provide plaintiffs with all drafts of damage reports.
8 DECEMBER 2014 Claims Magazine
N.Y. judge cracks down on ‘peer review’
practice in Sandy claims
By Caterina Pontoriero, PropertyCasualty360.com
Brown is instructing all
companies in Sandy cases
to provide plaintiffs with all
drafts of damage reports.