Editor's note: This is the third of a three-part series of stories based on LegalNewsLine.com's conversation with Mississippi Attorney General Jim Hood.

WASHINGTON, D.C. - For a short time in January, things appeared to be heading toward a resolution in Mississippi.

A federal judge sided with two policyholders in their case against State Farm Insurance Co. that alleged a lack of coverage after Hurricane Katrina.

Attorney General Jim Hood reached a settlement agreement in his own case against State Farm, and the other four companies he sued weeks after Katrina were ready to follow suit.

Also, the settlement would keep State Farm in Mississippi, and Hood's office would receive $5 million in investigative costs, while the rest of the State Farm settlement, estimated to be worth as much as $500 million, would "provide a quick flow of capital at a critical time" to an area struggling to rebuild after the hurricane, Hood said.

And, finally, Hood decided that a criminal investigation wasn't in order.

But Judge L.T. Senter refused the settlement, State Farm decided to stop taking new business in Mississippi and Hood turned to calling the company names like "robber barons."

Now Hood can't be worried about what has happened -- only what will. And what will ultimately happen with these cases might not happen for a long time.

"Monday, we sent a letter to Judge Senter requesting the opportunity to form a working group of lawyers who will work with State Farm to meet the objections he has with the settlement with State Farm," Hood told LegalNewsline.com at the National Association of Attorneys General spring meeting.

"Our overall goal -- the whole reason we settled with State Farm -- is to keep them in the state. That was one of their assurances. Other companies say they are waiting on them before they take a similar course of action."

In the last few weeks, State Farm has asked Senter to recuse himself from presiding over a certain class of policyholders involved in the settlement talks, reached a settlement with a couple in federal court after finding out that punitive damages weren't appropriate and asked Senter permission to submit an extra-lengthy brief on its post-trial motions in the Broussard case, the one from January that, at first, seemed to signal the beginning of the end.

Now, State Farm wants an extra 45 pages and hinted at the likelihood of an appeal of the decision, which awarded $223,292 in compensatory damages and another $2.5 million in punitive, though Senter lowered that amount to $1 million.

Senter had taken the case out of a jury's hands by making the guilty ruling himself, then told the jury State Farm had acted in bad faith.

"State Farm submits that 10 additional pages are necessary due to the nature of the important issues that are to be raised in its Motion. This is the first Katrina-related jury trial in which several of these issues have been raised. Thus, it is important that they be given proper attention and fully briefed since, regardless of how the Court rules, these issues are likely to be appealed," the company's motion says.

Hood is still plugging away on the settlement and recently asked to intervene during a Feb. 28 meeting. He also said he is receptive to the idea of reopening a criminal investigation.

Meanwhile, he keeps trying to put the pressure on State Farm by publicizing the company's economic situation. He's repeatedly mentioned that the company had a record year in 2005, and last week sent to recipients on his office's press list a story that described the $5.26 million raise State Farm Chief Executive Officer Ed Rust received.

And though Insurance Information Institute President Bob Hartwig testified before Congress that homeowners insurance has been a losing proposition in the past 25 years, Hood said homeowners premiums are still "money that they take and invest and make money off of."

At presstime, Hood's office said it could not meet a request for a list of the attorneys who will make up his "working group of lawyers" that will work with State Farm, nor would it provide the reason each attorney was chosen.

Those answers, as well as an outcome, will have to wait. With State Farm's recent movements, Hood may not have any other choice.

"We've been trying to get a resolution since day one to pay off those slabs (near-total or total destruction cases)," Hood said. "Most companies did pay for this.

"State Farm even paid for my roof 180 miles north in Jackson."

No matter what the future holds, at least he'll have a roof over his head.

More News