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Mississippi Supreme Court rejects State Farm’s Katrina appeal

Steve Loper of Pascagoula is one of many policyholders who planted signs after Hurricane Katrina to protest their treatment by insurers that rejected claims of wind damage, maintaining storm surge covered by federal policies caused the losses.
Steve Loper of Pascagoula is one of many policyholders who planted signs after Hurricane Katrina to protest their treatment by insurers that rejected claims of wind damage, maintaining storm surge covered by federal policies caused the losses. jcfitzhugh@sunherald.com File

The state Supreme Court refused to dismiss Attorney General Jim Hood’s lawsuit against State Farm Fire & Casualty Co. over its handling of Hurricane Katrina claims.

State Farm had appealed a decision by Circuit Judge Tomie Green, who had refused to dismiss the case. In December, Green decided Hood should have at least 90 days to collect evidence in the case before ruling on the insurance company’s motion to dismiss.

In a 5-3 decision, the Supreme Court refused to consider State Farm’s appeal.

Hood contends State Farm owes the state millions because federally funded homeowner grants reimbursed policyholders for losses the insurance company’s policies should have covered.

The lawsuit, filed in Hinds County Circuit Court, accuses State Farm of fraud, negligence and breach of contract. The state seeks unspecified compensation for its losses, plus punitive damages, court costs, interest and attorneys’ fees. Although the lawsuit was filed almost 10 years after Katrina hit in 2005, no statute of limitations applies to the state under its constitution and state law.

Hood’s suit focuses on the state Homeowners Assistance Program funded by the federal government and designed to compensate qualified homeowners for Katrina losses not covered by insurance. In some cases, the lawsuit says, State Farm delayed payments to policyholders so HAP grants would cover their losses.

The lawsuit says Mississippi paid 6,810 policyholders five times more than State Farm did for Katrina damage.

The state paid a total of $522 million to State Farm policyholders, the lawsuit says, or an average of $76,673.59 per policyholder. State Farm paid the same policyholders $98.7 million, or an average of $14,494.62 per policyholder.

In an unrelated case, a federal jury in Gulfport found State Farm had defrauded the National Flood Insurance Program by charging it for damage the company should have covered. Attorneys who worked on the federal case, Maison Heidelberg of Jackson and August Matteis Jr. of Washington, are helping Hood with the state lawsuit.

Anita Lee: 228-896-2331, @calee99

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