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

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

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

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

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 follow McCarty in hopes of uncovering personal information about him to justify his firing from the OIR.

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