Insurance Co. in Mold Remediation Investigation
The inquiry by Farmers Insurance Group involves Wardlaw Claims Service of Waco, as well as mold remediators North Texas Prime Services Inc., KK&C Enterprises Inc., North Texas Angel Plumbing L.L.C, Darcy Boatman Builders and other entities formed by North Richland Hills general contractor Darcy Boatman, a former adjuster for Wardlaw.
In six lawsuits filed by Texas homeowners, Dallas attorney John H. Carney has alleged that North Texas Prime Services and its affiliates in the business of remediating mold damage in Texas homes performed shoddy or incomplete work. In many of those instances, referrals to Boatman came through Wardlaw.
Subsidiaries of Farmers Insurance Group are defendants in all the lawsuits.
Boatman has denied the allegations in court, and Wardlaw declined to comment this week.
Said Mary Flynn, a spokeswoman at Farmers headquarters in Los Angeles: "We know that allegations have been made. As of now we've seen no evidence of the allegations they're making. But we are taking them seriously, and we are investigating the matter."
Wardlaw acts as a private adjuster for some of Texas' best-known property and casualty companies, including Farmers and San Antonio-based Texas Select Lloyds Insurance Co., which is named in a remediation lawsuit filed by a North Richland Hills woman.
Texas Select could not be reached for comment.
Boatman said in an interview that he launched North Texas Prime Services with at least one other former Wardlaw adjuster, but declined to name the individual. He said the companies only left work unfinished when homeowners withheld insurance payments from contractors or reached their policy limits.
Boatman was licensed as an insurance adjuster by the Texas Department of Insurance in 1993 and continues to hold a state license active through June 22, according to TDI records.
But he said his role as an adjuster has never caused a conflict with his remediation operations.
"Two of the guys with Prime are ex-adjusters. I'm an ex-adjuster. But there's no collusion. There's no anything," Boatman said. "The insurance companies hate our guts."
The allegations first surfaced in court filings a year ago -- a time when Farmers and State Farm Insurance Co., which writes more premium dollars than any property and casualty company in Texas, were emerging from a mold crisis that left the companies threatening to withdraw from the Texas market.
TDI launched an investigation of Farmers' trade practices in 2002, but dropped the probe after Farmers agreed to cut rates and make refunds.
State Farm and Farmers and nine more of the state's insurers, however, have appealed rate cuts ordered this summer by the insurance department. Farmers' rates would be cut by 17.5% under the insurance department plan.
North Richland Hills homeowner LaDonna Aubrey said her problems began after pipes connected to a solar water heater sprung lakes and flooded her home. Texas Select paid for damage caused by a leak in the system's slab, but declined to pay for pipe damage.
Aubrey claimed Boatman and his associates did substandard work and broke into her house when she removed an outside key. She said her home has been declared a "total loss," and the work was never completed.
The lawsuit said Skipp Potts, a Wardlaw adjuster, asked the companies affiliated with Boatman to be assigned the work.
Boatman said he left the job because Aubrey never passed along the money she got from the company.
"LaDonna Aubrey was paid in full, and she didn't pay for the work," Boatman said.
Another suit filed last year in Dallas County court against Farmers subsidiary Fire Insurance Exchange alleges that the water and toxic-mold damage Dallas homeowner Melva Heath sustained in December 2001 on North Hampton Road was never fully repaired, despite payments of more than $87,000 to North Texas Prime and its affiliates.
The suit says Heath paid Prime more than $27,000 on removal work and Boatman another $21,000 to "build back" the home once the mold was removed, but that Boatman walked off the job with the work unfinished in November 2002.
Heath said in court filings Boatman then billed her for another $26,342 for work that was never performed and withheld her furniture, clothing and other items removed from the home to get payment.
Heath made an additional payment of $12,726 and discovered items damaged or missing, she said. Her attorneys argued that Wardlaw, Fire Insurance and the remediators acted in a conspiracy to get paid the maximum on Heath's policies because of her health conditions.
Boatman has denied the allegations and said Heath was underinsured and unable to pay for the work that was done.
"Mrs. Heath is an elderly lady. There's no wrongdoing on Farmers' part. She was underinsured and they paid her the maximum amount she had on the two claims," said Boatman.
A computer analysis of TDI data published by the Fort Worth Star-Telegram in November showed Farmers led all home insurers in consumer complaints for nearly three years. The company blamed the problem on mold.
TDI Public Affairs Director Jim Hurley said those complaints have not included the allegations raised in the lawsuits.
"I'm unaware of any of those complaints being brought to the department," he said.