[StBernard] State Farm coughs it up

[Westley Annis]

State Farm Fire & Casualty Co. settled out of court Friday with a
Mississippi policyholder whose lawsuit over Hurricane Katrina damage was
scheduled to be tried next week in federal court. 
 
State Farm settled with Richard Tejedor of Long Beach only eight days after
jurors awarded $2.5 million in punitive damages to a different policyholder
-- a couple who sued the Bloomington, Ill.-based insurer for denying their
claim after the Aug. 29, 2005, storm. 
 
Terms of the settlement in the Tejedor case will not be disclosed, said
State Farm spokesman Fraser Engerman. "We are pleased that we were able to
resolve this issue before it went to (trial)," Engerman said. 
 
Jack Denton, one of Tejedor's attorneys, confirmed that the case has been
settled but declined further comment. 
Tejedor was one of hundreds
 
 of homeowners on Mississippi's Gulf Coast who sued their insurers for
refusing to cover billions of dollars in damage from Katrina's storm surge. 
 
Katrina destroyed his home, leaving nothing but a slab. A federal flood
insurance policy paid him the maximum $200,000 for the home and $80,000 for
its contents. Tejedor, however, said State Farm refused to pay for an
additional $263,190 in damage to his home and its contents. 
 
State Farm and other insurers say their homeowner policies cover damage from
wind but not from water, and that the policies exclude damage that could
have been caused by a combination of both, even if hurricane-force winds
preceded a storm's rising water. 
 
State Farm invoked that policy language to deny a claim filed by Norman and
Genevieve Broussard of Biloxi, whose lawsuit was tried last week in a
federal court in Gulfport. 
U.S. District Judge L.T. Senter Jr. took part of that case out of jurors'
hands, ruling that State Farm is liable for $223,292 in storm damage to the
Broussards' home. Jurors awarded the Broussards an additional $2.5 million
in punitive damages. 
 
The trial for Tejedor's lawsuit was scheduled to start Monday. State Farm
attorneys had asked for the trial to be postponed, but Senter refused. 
 
State Farm attorneys argued in court papers that a "barrage of publicity"
about last week's multimillion dollar verdict may have tainted the jury for
Tejedor's case. Senter, however, said postponing the trial would needlessly
disrupt the court's schedule. 
 
State Farm also is the defendant in the next four Katrina insurance cases
set for trial in Gulfport. The first is scheduled to start March 12