Woullard class action against State Farm dismissed

John O'Brien Apr. 17, 2007, 6:00pm


GULFPORT, Miss. - In a move that seemed to surprise no one, a federal judge on Monday dismissed the long-troubled Woullard class certification attempt that was part of Mississippi Attorney General Jim Hood's proposed settlement with State Farm Insurance Co.

Trial lawyer Richard Scruggs, who helped negotiate the proposed settlement with State Farm over an alleged lack of coverage following the destruction of 2005's Hurricane Katrina, had already withdrawn his request for the Woullard class, led by Dennis and Imani Woullard, to be certified.

Hood made a last-ditch effort to force acceptance of the settlement, which U.S. District Judge L.T. Senter originally denied doing because of fairness problems he perceived in it. Also on Monday, he denied Hood's motion.

"Senter rejected the motion to intervene because Scruggs had dropped his motion to certify the class, State Farm had lost interest in the class action because of difficulty getting it certified by Senter and the named plaintiffs and State Farm settled out of court," said David Rossmiller, an insurance attorney and partner at Dunn Carney in Portland, Ore., who has been analyzing the Gulf Coast's insurance situation for LegalNewsline.

The Guice class, about 900 homeowners whose homes were nearly or totally destroyed, last month was also turned down by Senter, whose final opinion on Woullard can be found here.

Hood's proposed settlement established a procedure to revisit claims from policyholders who had not sued but still could. State Farm's minimum offer would have been 50 percent of the structural value, and if the policyholder declined it, the case would go before an arbitrator. It was estimated the settlement, which would have affected about 35,000 policyholders, would be worth around $500 million.

Senter had problems with this procedure and denied the proposed settlement. In Hood's last motion, he blamed State Farm for the problems not being corrected.

"The state court settlement agreement requires State Farm to establish an orderly, fair, and prompt administrative procedure to reevaluate Hurricane Katrina claims in Harrison, Hancock and Jackson counties based upon criteria and guidelines approved by this Court, and enforceable by legal action in this Court," Hood wrote.

"As a result of State Farm's failure to establish an acceptable procedure for the reevaluation and settlement of claims which could be approved by this Court, State Farm is in breach of its settlement agreement with the Attorney General."

Rossmiller said Hood may have been the only still trying at that point.

"Hood apparently believed the class action certification and settlement was part of the deal he struck with State Farm, but Senter in essence said that no one cared about the class action anymore except Hood, and there was no point to discussing it further," said Rossmiller, whose blog can be found here.

"In his order, Judge Senter did remind Hood that he is free to pursue whatever actions he deems appropriate in another forum."

State Farm has reached a deal with Insurance Commissioner George Dale to revisit previous claims, though the Scruggs Katrina Group team of lawyers has publicly ridiculed it with a cartoon depicting Dale as a pig with lipstick on.

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