By ANITA LEE
Biloxi Sun Herald

A Diamondhead homeowner who rallied policyholders to fight for payment of their Katrina claims has settled her lawsuit with State Farm Fire and Casualty Co. Notice of the settlement was filed Friday in U.S. District Court in Gulfport. Terms were undisclosed.

Kenneth and Judy Dutruch sued State Farm in June 2007. They accused the company of breaching its contract to cover Katrina damage to the couple's vacation home and sought punitive damages for denial of their claim.

Judy Dutruch has told the Sun Herald in previous interviews State Farm refused to consider evidence of wind damage to the couple's South Diamondhead home off the Bay of St. Louis. State Farm sent experts to examine the property only after the Merlin Law Group filed the lawsuit on the Dutruchs' behalf.

Experts hired by the Dutruchs, including a forensic arborist, concluded their home suffered extensive wind damage - covered under their State Farm policy. State Farm concluded storm surge, excluded from coverage, destroyed the home.

As a result of widespread denials by State Farm and other major insurance companies, Judy Dutruch formed the Slingshot Gang in Diamondhead to unite waterfront homeowners. They pooled money to pay for expert reports, shared information and provided moral support to one another.

Many members of the group have settled their claims, but the Slingshots agreed not to disband until all claims were resolved.

As part of the settlement, both sides agreed not to disclose the terms. In fact, they could say little more than they were "pleased."

Judy Dutruch added, "We are certainly glad that it is all over and we can now start thinking about future plans of rebuilding."

A State Farm spokesman said, "We're pleased to have resolved our differences with Mrs. Dutruch."