Farm Bureau seeks dismissal of fraudulent claims-handling suit

Farm Bureau is seeking dismissal of a lawsuit filed against it by two of its former investigators who allege fraudulent claims-handling practices.

Farm Bureau Property & Casualty Insurance Co., and certain company leaders, have been accused of covering up fraudulent claim-handling activities in six states.

The suit stems from a 2023 residential fire claim in Nebraska. According to the suit, a Farm Bureau adjuster allegedly used a credit card to break into a detached garage not associated with the location of the house fire, which was then allegedly covered up by top Farm Bureau officials.

The complaint states that the investigators “were often and continually directed not to make mandatory referrals to the appropriate Departments of Insurance for review and investigation by the appropriate insurance regulators in states where FBL was operating and conducting business, including Kansas, Iowa, Nebraska, Utah, Arizona, and New Mexico, by members of the FBL Management Group.”

It goes on to state that certain actions of an informal group, or association of some managers of FBL — defendants Paul Swinton, Ronald Mead, Daniel Pitcher, Anthony Kimmi, Mark Wickham, Karl Olson, and Karen Rieck — in connection with the May 5, 2023, Nebraska fire claim were not only unethical, but also violated the law.

The motion to dismiss requests an order dismissing the entire complaint or to dismiss the claims against certain individual defendants who are not named in the motion.

“Plaintiffs’ complaint fails to state a viable claim for relief,” the motion states. “Despite littering their complaint with allegations of RICO [Racketeer Influenced and Corrupt Organizations Act] violations, plaintiffs lack standing to assert such claims, not to mention the fact that the claims are reverse pre-empted by the McCarran-Ferguson Act, 15 U.S.C. § 1012.

“Additionally, the predicate acts on which plaintiffs base their RICO claims lack continuity for all defendants and, for several other defendants, are so dissimilar that they cannot constitute a pattern of racketeering. Without an underlying claim for a violation of RICO,
plaintiffs’ second claim for a RICO conspiracy claim automatically fails and, in any event, fails to even properly plead a conspiracy as to defendants [Daniel] Pitcher and [Ronald] Mead.

Farm Bureau also argues that the Iowa-based claim is “similarly deficient.”

“Plaintiffs have failed to identify or plead any clearly defined and well-recognized public policy that could support such a claim,” the motion states. “And even if they have, plaintiffs’ allegations fail to show that their terminations would undermine any such policy.”

Due to “complex issues” in its motion to dismiss, Farm Bureau has requested oral arguments rather than written.

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