Workers’ Comp CEO Alleges Alabama Officials Wrecked His Business

A former campaign supporter of Alabamam Governor Bob Riley is suing him and other present and former state officials, accusing them of conspiring to drive him out of the insurance business.

John W. Goff of Montgomery filed the suit last Friday in Montgomery County Circuit Court. The suit alleges that Riley, state Insurance Commissioner Walter Bell, former Lt. Gov. Steve Windom and others worked together to wreck Goff’s worker compensation insurance business.

“Goff went from being one of Alabama’s leading and reputable insurance providers to being wrongfully disgraced, publicly humiliated and financially ruined as a result of a vendetta waged against him by the defendants and others,” the suit said.

Jeff Emerson, Riley’s communications director, said the administration had not yet received the lawsuit and could not comment.

Windom, likewise, said he had not seen the suit and could not comment, but he released a letter he received from Goff’s former attorney last May, saying Windom was not “involved in attempting to do harm to Mr. Goff.”

Goff submitted with the lawsuit a letter he wrote to Riley in January. It recounts two trips Riley made to Washington aboard Goff’s plane while running for governor in 2002, and it seeks $25,000 in reimbursement for the trips.

Riley’s son, Birmingham attorney Rob Riley, wrote back, saying the flights had been considered in-kind contributions to the campaign. One was listed on Riley’s campaign finance reports, but the other was left off because of “an oversight,” the governor’s son wrote. After an exchange of more letters, the Riley campaign paid Goff $25,000, according to records submitted with the suit.

In the suit, Goff alleges Windom used his friendship with Riley and Riley’s insurance commissioner to turn the state officials against him and go after his insurance business. The Insurance Department filed an administrative complaint against Goff in July 2004, accusing him of wrongdoing involving customers’ insurance payments. Goff’s suit alleges that many of the statements in the administrative complaint were false, and it ruined his business.

In its 2004 complaint against Goff’s firm, the Alabama Department of Insurance accused Goff of collecting more than $800,000 from Alabama customers and agents and not passing along the money to companies that were actually writing the insurance.

Company attorney Tommy Gallion said then that company disputed the complaint, but it has nearly wrecked the company.

“We are fighting it as hard as we can fight it,” he said.

Goff and his company are licensed by the DOI to provide insurance through a variety of companies. Goff describes itself as “one of the largest third-party administrators in the Southeast.”

At issue in the complaint were workers’ compensation and employers liability insurance provided through XL Specialty Insurance and Greenwich Insurance.

The complaint, filed July 2, 2004, accused Goff and his company of “fraudulent, coercive or dishonest practices.” It listed 50 businesses, churches, colleges and charities across the state that it said paid more than $800,000 for insurance in 2002, but Goff never gave XL and Greenwich their share.

Gallion said no Alabama customers lost any money. He said the DOI jumped into the middle of a civil dispute between Goff, XL and Greenwich without waiting for it to be resolved in the courts.

The legal dispute between Goff, XL and Greenwich went to arbitration in Pennsylvania. On March 10, 2004, three arbitrators awarded more than $4 million to XL and Greenwich. Gallion said Goff appealed that decision, which involved more than just customers in Alabama.

The DOI said it began investigating the company when policyholders complained about getting notices from the insurance carriers that bills hadn’t been paid and the insurance was being canceled.

The 50 customers listed in the complaint included Auburn University, Springhill College, Children’s Harbor, Bethel Baptist Church in Dothan, First Baptist Church of Foley, Fairhope United Methodist Church, and Frazer Memorial United Methodist Church in Montgomery.