Policyholders settle State Farm lawsuits
as posted at www.sunherald.com
March 22, 2006
Policyholders represented by former attorney Dickie Scruggs have settled their lawsuits against State Farm, including a racketeering case that alleged the insurance company conspired with vendors to minimize Katrina damage payments.
Policyholder law firm Provost Umphrey indicated more than 225 cases — 90 percent of those the firm had against State Farm in Mississippi — have been settled, including the racketeering lawsuit with 38 plaintiffs. Terms of the settlements are confidential.
“A combination of factors came together to allow the successful resolution of these claims including the compensation amount, the exhaustion of the clients with the legal pursuit of their claims, unfavorable legal rulings over the last year and a half and a fresh perspective afforded by new counsel,” a typed statement from Provost Umphrey said.
State Farm spokesman Jeff McCollum said, “State Farm always tries to resolve any disputes with our policyholders and is pleased we were able to do so here.”
Scruggs filed the racketeering lawsuit with much fanfare in June 2007, calling a news conference at lead plaintiff Glenda Shows’ destroyed home on the Pascagoula waterfront. Scruggs’ team of attorneys said the lawsuit would show State Farm and its bank had engaged in a criminal enterprise with vendors to deprive policyholders of money they were owed for wind damage.
By December, Scruggs was under indictment for bribing a judge in north Mississippi. Most of his Katrina cases were transferred to the Provost Umphrey firm in Texas at the Scruggs Katrina Group’s recommendation.
The Shows case lay dormant for months before settlement. Last week before the settlement was announced, the Shows plaintiffs asked that the racketeering claims be dropped.
McCollum said Monday, “State Farm does not engage in the sort of activity alleged in this litigation.”
United Policyholders is a non-profit organization founded in 1991 and dedicated to educating the public on insurance issues and consumer rights. UP publishes educational materials and serves as a resource for individual and business policyholders and residents of communities with insurance problems. UP’s Amicus Project provides information to courts of law to support policyholders’ legal rights. UP unites policyholders and their advocates by sharing information. Write to UP at 110 Pacific Ave., PMB 262, San Francisco, CA. 94111, call us at (510) 763-9740, or visit our website at www.unitedpolicyholders.org.
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