JACKSON, Miss. (Legal Newsline) – Mississippi Attorney General Jim Hood has hired the private attorneys for two whistleblowers to pursue his latest lawsuit against State Farm Insurance over its handling of post-Hurricane Katrina claims.
State Farm was one of the five insurance companies Hood sued in the weeks following the 2005 storm, alleging they misrepresented the amount of damage done by wind (covered by their policies) and water (covered by a federal program).
Now, Hood and the private attorneys are claiming in a lawsuit filed April 21 in Hinds County Circuit Court that State Farm caused the state’s Homeowner Assistance Program to pay too much to homeowners for Katrina damage not covered by its policies.
“State Farm took advantage of our program by causing HAP to pay for wind losses that State Farm should have covered under its homeowner policies,” Hood said.
“Remarkably, State Farm and other insurers walked away from Hurricane Katrina and experienced record profits in the years following, while Mississippi continues to suffer.”
Through denying claims, State Farm shifted the burden of payment to homeowners to HAP, Hood claims.
Hood hired Heidelberg Harmon of Ridgeland, Miss., and Weisbrod Matteis & Copley of Washington, D.C., to represent the State. Those two firms are also representing Cori and Kerri Rigsby, two sisters who teamed with former plaintiffs attorney and convicted felon Dickie Scruggs after Katrina.
The sisters claimed to have documents that showed State Farm minimized wind damage to policyholders. They collected the documents while employed at E.A. Renfroe, which performed work for State Farm after Katrina.
Scruggs, who was later convicted of bribing a judge in a dispute over attorneys fees with business partners, formed the Scruggs Katrina Group after the storm and hired the Rigsby sisters as consultants with $150,000 salaries.
In 2013, a federal jury in the Rigsby sisters’ lawsuit found that State Farm coerced an engineering firm to change a damage report. The case has been appealed to the U.S. Court of Appeals for the Fifth Circuit.
The original jury verdict called for State Farm to pay $758,250 to the United States, nearly $3 million in attorneys fees.
The sisters also are to each make 15 percent of the award to the United States.
Hood also hired the regional firm Balch & Bingham for his latest suit.
HAP was established after Katrina to provide financial assistance to state homeowners whose insurance did not fully cover the damage they suffered.
State Farm spokesman Phil Supple said the lawsuit was unexpected “considering what we have done in resolving claims as a result of Hurricane Katrina.”
Hood’s contract with Heidelberg Harmon has been posted online.
Private attorneys will make 25 percent of any recovery up to $10 million, though the percentage decreases in increments until five percent of any recovery exceeding $25 million.
From Legal Newsline: Reach editor John O’Brien at jobrienwv@gmail.com.