After Two Years of Emerging Evidence – Plaintiffs Say Claim Handled Properly – State Farm® Settles McIntosh Lawsuit
Bloomington, Ill., September 15, 2008 – Just days after attorneys for Thomas and Pamela McIntosh of Biloxi, Miss., acknowledged State Farm handled their claim properly and admitted there was “no credible evidence” State Farm engaged in bad faith, a compromise settlement has been reached over insured damages to the McIntosh home for $250,000 which is less than 25 percent of the amount the McIntoshes alleged as damages in their breach of contract suit. This brings an end to McIntosh v State Farm, a case that well-known litigator Dickie Scruggs, now serving a five-year sentence in a federal penitentiary for bribing a judge, used to call into question the integrity of State Farm and the insurance industry.
The motion for dismissal was filed by the McIntoshes’ current attorneys, Tina Nicholson and William F. Merlin, Jr., of the Merlin Law Group, on Sept. 7, 2008. U.S. District Judge L. T. Senter, Jr., granted the order for dismissal, Sept. 8, 2008.
The company noted that the McIntoshes’ former attorney Dickie Scruggs made up allegations in this lawsuit to launch a public relations plan to lure politicians, the media and others into publicly attacking State Farm. This was a tactic that diverted precious time and resources away from resolving Katrina claims.
“Dick once said he used every trick in the book, political, public opinion, and legal to force State Farm to pay him money. This case was his centerpiece,” said State Farm Senior Vice President and General Counsel Jeff Jackson.
Scruggs launched his campaign against State Farm just days following Katrina. Scruggs encouraged Mississippi Attorney General Jim Hood to file a lawsuit seeking to overturn the flood exclusion policy.¹ And by October 2005, the Rigsbys began stealing State Farm documents including copies of engineering reports related to the McIntosh claim.
Court records show Scruggs contacted Thomas and Pamela McIntosh after sharing his version of the handling of their claim with a ABC News 20/20 and the Associated Press in August 2006. And, although Mr. McIntosh had previously signed a statement saying he was satisfied with his claim resolution and wished to be left out of the media spotlight, Scruggs persisted, ultimately convincing the McIntoshes to sue State Farm for millions of dollars in punitive damages.
In addition to Scruggs, former Mississippi Senator Trent Lott, also Scruggs’ brother-in-law, U.S. Congressman Gene Taylor, and Attorney General Hood publicly attacked State Farm, citing the McIntosh case to the media and on the floor of Congress as evidence State Farm acted in bad faith.
As a key part of his media-fueled attack on State Farm, Scruggs and the sisters identified an engineering report from the McIntosh claim before national and local media calling it a “smoking gun.” This was also the report, the first of two in the claim file, which had the infamous sticky note affixed: “Put in Wind file – DO NOT Pay Bill --DO NOT discuss.” Evidence now shows that The Scruggs Law Firm, the sisters and others deliberately mischaracterized the purpose of this note.
In sworn testimony, Kerri Rigsby acknowledged that payment of flood insurance benefits was appropriate. Also, Brian Ford, the engineer who inspected the McIntosh property testified that the second report was more accurate and that he agreed with its conclusions. The whereabouts of the first engineering report have not been conclusively determined. The Rigsbys and Scruggs never provided any proof of their allegations that it was destroyed. Instead, sworn testimony from two former friends of the Rigsbys strongly indicates that it was stolen by the sisters as part of Scruggs’ failed scheme.
State Farm handled more than 295,000 property claims and paid (not including payments made under the National Flood Insurance Program) more than $3.1 billion as a result of Katrina. “We dedicated tremendous resources to handle and pay claims,” said State Farm Vice President Claims President Susan Hood.
State Farm said it sent more than 5,500 people to the Gulf Coast to adjust claims and help people recover from the storm.
“State Farm agents and employees toiled for months in extreme conditions and admirably worked to help Katrina survivors while facing a daily onslaught of charges from the media, politicians and trial lawyers,” Hood added.
Closure of the McIntosh case should put to an end allegations State Farm acted in a dishonorable way in the handling of this particular claim.
1Trial Lawyers, Richard K. Scruggs, a/k/a “Dickie” Scruggs says he’s trying to get the Mississippi Attorney General to override flood exclusion clauses in the homeowners’ policies (Wall Street Journal-Sep 8. 2005)
For questions or more information, contact Jeff McCollum , Public Affairs, at (309) 766-0307.
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