State Farm's proposed class-action settlement for Mississippi homeowners with Hurricane Katrina damage is a quick, simple remedy for those who want to take part, an attorney told a federal judge yesterday.

The comments came from Richard F. Scruggs, an attorney for property owners, in a statement presented to U.S. District Court Judge L.T. Senter Jr. in Gulfport, Miss. Judge Senter rejected the initial settlement proposal on Jan. 26, saying he could not call it "fair, just, balanced or reasonable."

Judge Senter, after hearing comments from speakers for and against the settlement, issued no immediate decision.

State Farm Fire and Casualty, in papers filed before the hearing, said its proposed class action could provide a payout to 36,000 property owners.

The company, in its memorandum, also said it believes the settlement "creates a process that is fair, while still being flexible."

As initially framed, it would provide a minimum of $50 million to homeowners and would pay 50 percent of policy value--no questions asked--to homeowners who were initially paid nothing even though their houses were reduced to a bare foundation slab.

Those who wished more could go through an arbitration process.

State Farm's claims handling became an issue when the company denied payment for homes hit by storm surge, citing windstorm policy language that excluded coverage for flood damage.

Judge Senter has ruled that even where there is storm surge involved, the insurer must pay for any portion of the damage that may have been caused by wind.

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