Whistleblower sues insurance company for shady practices

Anyone who has ever insured anything — a car, a house, or, if you're JLo, a sumptuously rotund rump — knows that insurance companies are about as trustworthy as automobile salesmen: You had better read the fine print lest the deal come back to kick you in the junk.

As an adjustor for Argus Fire & Casualty Insurance Company, Susan Varela knew this better than anyone. But 32 years in the industry didn't keep her from getting burned by her former employer.

In a lawsuit filed last September, Varela argues that Argus fired her for blowing the whistle on the company's practice of inventing reasons to deny or delay legitimate insurance claims. She says that Argus CEO and part owner Richard Parrillo Jr. "ordered [her] to... delay in the payment of legitimate claims." She even accuses Parrillo of creating "a fraudulent reinsurance scheme involving Hurricane Wilma" that lumped unrelated damages into Wilma claims to recover hundreds of thousands of dollars from other companies. Parrillo could not be reached for comment.

According to the lawsuit, Varela's complaints about that "scam" were so ignored that she had a nervous breakdown. Then, last March, Argus executives accused Varela of overpaying on customers' insurance claims. The affront allegedly sent Varela into near cardiac arrest: She "collapsed in the work place" and was hospitalized for five days.

Finally, the legal complaint continues, in late March an Argus executive took Varela out to lunch and told her she was fired.

Varela's lawsuit insists she was axed over her objections to Argus's "wrongful insurance practices" and her "refusals to follow directives... in violation of laws." If true, that would break a Florida law protecting whistle-blowers. But Charles Grimsley, chief legal officer at Argus, says Varela's lawsuit is bogus.

"We believe it to be unfounded," he says. "Ms. Varela is your classic disgruntled employee."

Varela and her lawyer refused to speak with New Times, but others in the insurance industry say shadiness abounds.

"None of it surprises me," says attorney Ken Duboff, who has more than 60 lawsuits pending against Argus alone. "But not just because it's Argus. The nature of the insurance industry is that way. They don't go out looking for coverage. They look for ways to deny coverage."

In fact, by some measures, Argus is one of the more honest insurance companies in South Florida, he says.

If that ain't a kick in the junk, we don't know what is.

KEEP MIAMI NEW TIMES FREE... Since we started Miami New Times, it has been defined as the free, independent voice of Miami, and we'd like to keep it that way. With local media under siege, it's more important than ever for us to rally support behind funding our local journalism. You can help by participating in our "I Support" program, allowing us to keep offering readers access to our incisive coverage of local news, food and culture with no paywalls.
Michael E. Miller was a staff writer at Miami New Times for five years. His work for New Times won many national awards, including back-to-back-to-back Sigma Delta Chi medallions. He now covers local enterprise for the Washington Post.