OMAHA - A judge must explain to the Nebraska Supreme Court why he ordered a new trial in a multimillion dollar insurance dispute involving Florida and Omaha-based Countrywide Insurance Agency.

In June 2008, the Supreme Court threw out Douglas County District Judge Peter Bataillon's ruling that Countrywide Insurance Agency should pay Florida $4.7 million in premiums and interest owed to a company Florida had taken over. Batallion ordered a new trial last year, but in February, the Supreme Court blocked it and asked Batallion to explain the decision at the request of Countrywide's owner, David Fulkerson.

The Nebraska Attorney General's office will defend Bataillon's handling of the case at Wednesday's hearing, contending he had the right to make the decision.

"Because this court concluded there are fact questions for a jury to decide, a reasonable interpretation of the opinion and mandate was that this court was remanding the matter for a new jury trial," Assistant Attorney General Tom Stine wrote.

The case has come before the Supreme Court three times before. Florida became involved in 1997 because its Department of Insurance took over an insolvent Florida insurance company, United Southern Assurance, that had been doing business with Countrywide Truck Insurance. The lawsuit was filed in 1998.

Countrywide Truck Insurance and United Southern were both owned by the same parent company, Concord General Corp. Fulkerson managed Countrywide Truck before the company's assets were transferred over to his new company, Countrywide Insurance.

Florida maintains that Countrywide Insurance kept millions that was owed to United Southern, but Countrywide and Fulkerson deny taking any money fraudulently.

Most of the money involved in the dispute came from premiums Countrywide Truck collected and was supposed to send to United Southern. But when Florida officials ordered United Southern to stop writing insurance policies in 1997, Countrywide Truck did not hand over four months of premiums.

Countrywide and Fulkerson argue the three previous Supreme Court rulings in this case have eliminated most of the issues Florida raised in the lawsuit. But Florida maintains some important issues still need to be decided in court and Fulkerson should explain fully where all the premiums went.

The Supreme Court ruled last year that Countrywide presented evidence that the missing premium money was either returned to customers or applied to new insurance policies with a different company. So it's not clear fraud was committed, the court said.

Fulkerson's attorney, William Gast, wants the high court to order the lawsuit dismissed once and for all.

Florida's attorney, Robert Craig, said the state doesn't think a full accounting has been done and more information is needed about who received the money.

Bataillon dismissed a jury in 2006 and ordered Countrywide to repay $2.23 million in premiums owed to the United Southern Assurance Co., and pay $2.44 million in interest. The Supreme Court later contended a jury, not Bataillon, should have decided the case.

The high court ruled in 1999 that the trial judge was wrong to issue a default judgment against Fulkerson and Countrywide. Then in 2005, the court ruled it didn't have jurisdiction to evaluate whether Bataillon should have recused himself from the case.

Craig said he thinks Bataillon has handled the case well over the years.

"It's fairly complicated and there's been a lot of misinformation," Craig said.

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Nebraska Supreme Court: http://www.supremecourt.ne.gov