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Policyholders withdraw bad faith claim...

Policyholders withdraw bad faith claim against State Farm

By: Magnolia Tribune - September 8, 2008

A Biloxi couple who accused State Farm of manipulating expert damage reports to minimize Hurricane Katrina’s wind damage has now conceded the company acted reasonably in adjusting the claim, according to court records filed over the weekend.

Policyholders Thomas and Pamela McIntosh are no longer seeking punitive and other extra damages in their federal lawsuit against the insurance company. The case received national publicity in 2006, when two former State Farm adjusters alleged a damage report on the McIntosh property had been altered without their knowledge to shift blame from wind to tidal surge so federal flood insurance would cover the loss.

Pre-trial investigation, the McIntoshes’ attorneys now say, shows State Farm “had a reasonable basis for taking the position it did regarding coverage.”

The McIntoshes were promptly and properly paid policy limits of $350,000 for flood damage and $36,228 for wind damage before an engineer inspected the property, the Merlin Law Group says in its motion to dismiss punitive damages, which are designed to deter corporate misbehavior.

The only issue remaining is whether State Farm breached its contract with the McIntoshes by failing to pay what was owed under the policy and any damages that would be owed as a result.

“I would be very hesitant for people outside the lawsuit to try to read too much into what it means when parties dismiss causes of action or take other actions within this lawsuit,” said William F. “Chip” Merlin Jr.
Sun Herald
9/8/8

H/T Just Me

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Magnolia Tribune

This article was produced by Magnolia Tribune staff.