NU Online News Service, July 29, 2:56 p.m.EDT

A Texas-based workers' compensation insurer has asked a federaljudge to dismiss the lawsuit it filed against Florida InsuranceCommissioner Kevin McCarty.

Dallas National Insurance Co. had filed a federal lawsuit in Florida early this year, allegingMcCarty has a "personal vendetta" against its owner, CharlesWood.

According to court documents, Dallas National and Wood "havedecided to dismiss this lawsuit without prejudice" and ask thateveryone be responsible for their own attorneys' fees andcosts.

Dallas National says it sought advice from other state officialsas the case remained pending. "Based on that consultation and adesire to maintain a long-term positive relationship with the Stateof Florida, Dallas National and Wood have elected to dismiss thiscase," says the U.S. District Court filing made on July 27.

The Office of Insurance Regulation says McCarty has received themotion and the OIR is "reviewing its options."

The lawsuit was filed days before Dallas National and stateregulators were set to meet in court regarding a license denial.McCarty denied a license to the insurer in 2008 based on the factWood "has a pattern of behavior which the office findsuntrustworthy," and that "there is good reason to believe he hasacted in bad faith."

A Florida appellate court upheld McCarty's decision to deny a license to DallasNational.

Dallas National claimed McCarty held a grudge against it,stemming from a $5 million loan Wood once made to another company,Bankers Insurance Co.

In the mid-1990s, Bankers hired a private investigator to followMcCarty in hopes of uncovering personal information about him tojustify his firing from the OIR.

The attempt by Bankers failed. Mr. McCarty sued Bankers and waspaid $2.5 million by Bankers as part of a settlement.