Allstate Hires Crook, Gets Cop

On January 14, 1997 Thomas Ivers' 5,200 square foot home in Shingle Springs, California burned to the ground. The apparent cause was roaming goats having entered through an open door into the basement billiards room and knocking over a kerosene heater. The damage exceeded $1 Million. The property was insured by Allstate.

Allstate rejected the claim saying their investigator, working with a state fire marshal, had determined the cause to be arson. The insured hired attorney Glenn W. Peterson of McDonough, Holland & Allen and filed a Bad Faith suit against Allstate in El Dorado County Superior Court in 1998. Allstate hired Richard J. Edson of Edson, LaPlante & Spinelli to defend against the Bad Faith action.

As a matter of course, Defense Counsel hired a private investigator to collect information to see if they could discredit the insured and force Mr. Ivers to drop his suit. The private investigator hired by Allstate's defense counsel was Charles Lee O'Neal. Mr. O'Neal's report to Allstate's defense counsel included the fact that Mr. Ivers had been convicted of conspiracy to distribute cocaine some 15 years previously. This lead to unfounded allegations that Mr. Ivers had also been convicted of arson, possession of a firearm by a felon, was under investigation by the Washington State Gambling Commission for bingo fraud and had bilked an elderly relative of comedian Foster Brooks out of money invested in a phony scheme.

These allegations prompted the insured to bring a separate civil suit against Mr. O'Neal (the private investigator) and Mr. Edson (Allstate's defense attorney). Richard J. Edson's name has been dropped from that suit based upon a confidential settlement. The civil case against Mr. O'Neal is still pending.

This story gets even better (or worse, as the case may be). It became apparent that Allstate's insured seemed to have an extraordinary knowledge about what their defense team was doing. Frustrated by these events, Allstate's defense team commissioned O'Neal to "Acquire" copies of everything the insured had on their computer. To this end, O'Neal made contact with what he thought was an under-world type to perfect the acquisition. Unfortunately (for Mr. O'Neal), the mafia contractor he thought he was talking to (about making the acquisition) turned out to be retired Sacramento County Sheriff's Captain Ernest "Bernie" Buda, playing "Sal", a "hit man from San Jose". "Sal" was "wired to the hilt" as the clandestine conversation took place in a restaurant parking lot on July 22, 1999.

The Bad Faith litigation had been set for trial on June 30, 2001. However, because of the complications related to Mr. O'Neal's criminal charges, it has been continued to March, 2002. Allstate's defense counsel has recused himself as has Mr. Ivers' original attorney. Mr. Ivers is now represented by Glenn S. Guenard of Laskin & Guenard.