Firm Reaches Deal in Hurricane Katrina Suits

An engineering firm has reached a settlement with lawyers who have filed hundreds of lawsuits against State Farm Insurance Cos. on behalf of policyholders whose claims were denied by the insurer after Hurricane Katrina.

Under terms of the settlement, Forensic Analysis and Engineering Corp., which helped State Farm adjust policyholder claims in Mississippi, would be dropped from a federal lawsuit that accuses the insurer of engaging in a "pattern of racketeering" after the storm.

Forensic would be dismissed from several of those suits, including one filed in June that accuses Bloomington, Ill.-based State Farm of violating the civil Racketeer Influenced Corrupt Organization Act, or RICO, in its handling of claims after the Aug. 29, 2005, hurricane.

Zach Scruggs, one of the attorneys who filed the RICO case against Forensic, State Farm and engineering firm E.A. Renfroe & Company Inc., said the settlement will "better enable us to prosecute our cases against State Farm." Scruggs said he couldn't elaborate, however, because the terms of the deal are confidential.

In a related development this past week, a federal magistrate in Gulfport, Miss., agreed to lift a court order that had barred Scruggs from providing a federal grand jury with a Forensic employee's computer hard drive.

Copyright 2007 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed

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