Fearing that the case would settle and State Farm would ask that all the documents be sealed, he made hurried trips back and forth across the desert that summer, delivering the goods back to his Scottsdale office as they became available.
The case did settle -- for $30 million. And while State Farm asked that all its corporate paperwork be returned, the judge refused that request.
Back home, Thur went through the files. He found ammunition in State Farm's internal documents revealing that the company used a program called Performance Planning and Review (PP&R) to base employees' salaries and promotions on a formula meant to cut the amount paid out, including the amount paid out to its own policyholders.
Thur also found a training manual in which the company's head of claims said State Farm's goal was to have the most profitable claims center in the industry.
State Farm maintains that statement is taken out of context, that the point was everyone needed to handle claims efficiently and effectively.
Thur and consumer watchdog Ina De Long argue that the claims department should not be a profit center. Insurance companies' profit should come from underwriting -- actually selling policies to folks -- not from trying to limit how much the company pays out to its own clients. Those amounts, whether they stem from a car accident or a fire or an earthquake, are entirely dependent on how much damage was done and how much is needed to compensate for the loss. While State Farm needs to protect itself against fraud from spurious demands for payouts, Thur maintains that the drive to turn the claims department into a profit center exposes State Farm's policyholders to brutal business practices.
According to State Farm's own documents, claims agents were instructed to meet certain formulas when they wrote damage estimates -- formulas that specified how much of a car repair estimate should be attributable to prior damage, for example, and what percentage of the job should require generic or used parts. And, the documents showed, agents would be rewarded or promoted for meeting those goals and reducing the amounts they paid out.
State Farm says it no longer uses the PP&Rs. The judge in Utah, however, found two years ago that the company merely replaced that manual with verbal policies that essentially do the same thing. Despite what is clearly shown in several of State Farm's own documents, public information officer Compain-Romero says employees were never rewarded or promoted for reducing claims. And she says the company never required set percentages on certain types of repairs, but only suggested those numbers as guidelines. "We've never had a policy to settle claims for anything less than what is owed," Compain-Romero says.
De Long, who testified in Kim Zilisch's case, said after decades in the underwriting, claims and disaster department of State Farm Fire and Casualty Co., she was familiar with the motive of the company to make money in the claims departments. She said adjusters were given monthly updates as to the average claims paid and were encouraged to cut those.
De Long told jurors "claims profit" was the amount reached by subtracting the amount paid out on a claim from the amount the claim was really worth. She said she was uncomfortable even using the two words together.
"That's totally inappropriate," she told jurors in Zilisch's trial. "An insurance company should have underwriting profit, not claims profit. That's like 'honest crook.'"
Included in the documents turned over in the 1993 case were stacks of PP&R assessments for individual employees, revealing that they were rewarded -- and even encouraged to participate in contests -- for meeting those arbitrary goals when they evaluated claims.
Thur says the papers obtained in 1993 not only provided the smoking gun for something attorneys had heard about for years, but also specifically helped prove bad faith in the next two State Farm cases he took to trial. One was Kim Zilisch's case. The other involved a claim by a Scottsdale woman named Betty Olson.
An industry claims expert says those two trials were only the fourth and fifth time jurors anywhere in America have been able to hear of State Farm's practice of performance-based compensation for agents.
In four of those cases, jurors found that State Farm had acted in bad faith and assessed millions of dollars in punitive damages. In addition to the Zilisch case, which resulted in a $1 million verdict, and the Olson case, which yielded a $6 million verdict, State Farm was hit with a $1.2 million punitive-damages verdict in Weiford v. State Farm (later overturned in 1992), a case involving an Alaska motorist, as well as the $145 million verdict in Campbell v. State Farm, the Utah case that is on appeal.