Sen. Lott Settles Katrina Claim with State Farm Before Trial

By Michael Kunzelman
April 29, 2007

U.S. Sen. Trent Lott, R- Miss., has agreed to settle the lawsuit he filed against State Farm Fire and Casualty Co. for refusing to cover Hurricane Katrina's damage to his Gulf Coast home, an attorney for the Mississippi Republican said Friday.

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Terms of Lott's settlement with State Farm were not disclosed. Zach Scruggs, one of the senator's attorneys, said he expects the deal to be completed early this week.

"I think it's fair to say it's a done deal,'' Scruggs said. "Right now it's an agreement in principle, and he should be signing the papers soon.''

Lott, whose case was set to be tried in a federal court in Gulfport, Miss., in September, told The Associated Press last month that he was weighing a settlement offer from the company but hadn't ruled out a trial for his case.

State Farm agreed in January to pay about $80 million to up to 640 policyholders, including Lott, who sued the Bloomington, Ill.-based insurer. Most of those policyholders have accepted the settlement and received their money, but Lott was among a handful of plaintiffs who have balked at settling.

Efforts to reach a spokesperson for Lott weren't immediately successful last Friday.

"We are pleased to have reached a tentative agreement to settle Senator Lott's claim and to have avoided litigation that might have been lengthier and more expensive for both parties,'' State Farm spokesman Fraser Engerman said.

Lott was among hundreds of Gulf Coast policyholders who have sued their insurer in the aftermath of the Aug. 29, 2005, storm. State Farm and other companies have refused to pay for damage from Katrina's storm surge, which they say is excluded from their homeowner policies.

Engerman said State Farm has resolved 99 percent of all Katrina-related claims filed by policyholders.

"What remains are those few cases where wind versus water issues are still in contention,'' he added.

Lott, whose beachfront home in Pascagoula was demolished by Katrina, is represented by a legal team led by his brother-in-law, high-profile attorney Richard "Dickie'' Scruggs.

The Scruggs Katrina Group has signed up about 50 new State Farm policyholders as clients since reaching the mass settlement of suits in January, said Zach Scruggs, Richard Scruggs' son and law partner.

Lott, who in the past has publicly called for limits on lawsuits, has sponsored legislation after Katrina that would end the insurance industry's exemption from antitrust laws.

"All this resolves is his case,'' Zach Scruggs said of Lott's settlement. "I assume the senator is going to continue to push and fight for the people of Mississippi.''