Sen. Lott Undecided Whether to Settle or Go to Trial On Katrina Claim

By Michael Kunzelman
March 26, 2007

U.S. Sen. Trent Lott, R-Miss., who sued State Farm Fire and Casualty Co. for refusing to cover Hurricane Katrina's damage to his Gulf Coast home, said last week that he is weighing a settlement offer from the company but hasn't ruled out a trial for his case.

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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's case remains on track for a trial in federal court in June.

"We haven't rejected a settlement, but we haven't come to an agreement on one,'' the Mississippi Republican said in an interview in the Capitol.

"This has always been about a lot more than me,'' he added. "I'm still looking at everything that's going on. I haven't made a decision to go forward with a trial, or not to.''

Richard "Dickie'' Scruggs, one of Lott's lawyers, said that he plans to try the case but knows that Lott hasn't ruled out a settlement.

"Not yet, but there are some things he has to be satisfied with first, and we aren't there yet,'' the lawyer said, adding that Lott's reluctance to accept a settlement "ain't about the money.''

Lott, whose beachfront home in Pascagoula was demolished by the Aug. 29, 2005, storm, said he would be "risking everything'' with a trial.

"They've been so arrogant,'' he said of State Farm. "They probably think well, 'We'll just show him,' but I'm not ready for a settlement or a proceeding at this point, so we'll see how things go.''

State Farm spokesman Phil Supple declined to comment on Lott's lawsuit, but he noted that the company reached an agreement this week with Mississippi Insurance Commissioner George Dale to re-examine and possibly pay more than 35,000 policyholder claims after Katrina.

"State Farm is still very interested in resolving outstanding claims with settlements,'' he said.

A court-ordered settlement conference for Lott's case is scheduled for Tuesday in Gulfport. A federal magistrate has instructed both sides to submit memos outlining a "candid appraisal of the respective positions, including possible settlement figures.''

Neither State Farm nor Lott's lawyers have disclosed how much the company has offered to pay Lott to settle his suit.

U.S. Rep. Gene Taylor, a Democrat whose home in Bay St. Louis, Miss., was destroyed by Katrina, is among Scruggs' clients who have settled their suits against State Farm.

Lott said he hasn't had any contact with State Farm since an adjustor told him in 2005 that the company didn't find any evidence of wind damage to his home. State Farm and other insurers say their policies cover damage from wind but not flood water, including wind-driven storm surge.

"I have heard nothing from that day to this, but I think that they've heard from me a few times,'' said Lott, who has sponsored legislation after Katrina that would end the insurance industry's exemption from antitrust laws.

(Associated Press writer Kasie Hunt in Washington contributed to this report.)