The Merlin Law Group has announced it has reached a settlement with State Farm Fire and Casualty Co. on 22 cases stemming from damage from Hurricane Katrina.

“Obviously, we are pleased to settle without costly and lengthy litigation,” State Farm spokesman Fraser Engerman said Wednesday.

Engerman declined to comment further because terms of the settlement are confidential.

William F. “Chip” Merlin, the policyholders’ attorney, said documents State Farm has been forced to produce in previous cases put clients in a good negotiating position.

Merlin said the documents and testimony from State Farm officials indicate the company decided against paying claims in areas hit by the storm surge, relying on policy language to deny those claims without thorough investigations.

In cases in which wind and water combine to cause a loss, the 5th U.S. Circuit Court of Appeals has ruled policy language precludes coverage.

However, Merlin said that does not relieve insurance companies of their duty under Mississippi law to fully investigate the cause of a loss and pay for wind damage covered under an all-perils policy.

State Farm maintains the company investigated each policyholder’s claim and covered independent wind damage.