NU Online News Service, Feb. 02, 10:52 a.m. EST

Florida Insurance Commissioner Kevin McCarty has filed a motion to dismiss a defamation lawsuit against him that alleges a “personal vendetta” he has against the owner of a workers’ compensation insurer prevented it from obtaining a license in the state.

Mr. McCarty filed the motion in the U.S. District Court for the Northern District of Florida on the grounds the court lacks jurisdiction. The motion calls on a principle that someone cannot bring a case before a federal court if the merits were already decided by a state court.

Late last month, Florida’s First District Court of Appeal affirmed Mr. McCarty’s decision to deny a license to Dallas National Insurance Company, owned by Charles David Wood, Jr.

The state Office of Insurance Regulation (OIR) in September 2008 denied the license request and said its reasoning was based on the fact that Mr. Wood “has a pattern of behavior that the office finds untrustworthy,” and that “there is good reason to believe he has acted in bad faith.”

On appeal of the license denial, Mr. Wood alleged the OIR’s decision was arbitrary and capricious and that its findings were fabricated to support its desired result. According to Mr. McCarty’s motion to dismiss the federal defamation suit against him, Mr. Wood makes the same allegations, which is not permitted.

According to the filing, the federal court “would effectively have to review and reverse the findings of the OIR and the decision of the First District affirming the OIR in order to grant relief sought by [Wood].”

Mr. Wood’s lawsuit claims that Mr. McCarty “fanatically determined that Wood would never engage in the business of insurance in Florida,” because Mr. Wood allegedly loaned another insurer, Bankers Insurance Company, $5 million.

In the mid-1990s, Bankers hired a private investigator to follow Mr. McCarty in hopes of unveiling information that would be embarrassing to him. The insurer believed Mr. McCarty, who then worked for the OIR as an industry coordinator between the office and the state’s Joint Underwriting Association (JUA), was threatening Bankers’ contract with the JUA.

Mr. McCarty sued Bankers and was awarded a $2.5 million settlement in 2000.