CALIF. COURT AWARDS SURGIN $58 MILLION

CALIF. COURT AWARDS SURGIN $58 MILLION

Characterizing an insurance company's practices as "vile," a judge awarded a manufacturing company in Tustin, Calif., nearly $58 million last week

because the insurer did not comply with its own policy - resulting in the loss of millions to its insured.

Orange County Superior Court Judge C. Robert Jameson ruled that Truck Insurance Exchange, a subsidiary of Los Angeles-based Farmers Insurance Group of Companies had "lied, cheated, stone-walled and tromped on the rights of the insured" by failing to represent Surgin Surgical Instrumentation in a lawsuit with a billion-dollar competitor."On a scale of 1 to 10 of vileness," Judge Jameson said, "Truck Insurance is an 11."

Truck is the state's largest provider of commercial insurance coverages, including auto, workers compensation, medical malpractice, inland marine and general liability and property damage coverages for truck owners and motor carriers, and the health industry.

Attorney Robert A. Olson, who monitored the trial for Truck, said the judge's ruling is "without factual or legal foundation" and that the company will appeal the case.

He said Truck is only liable for $270,000 in attorney's fees stemming from Surgin's legal scrap with Alcon Surgical Instruments.

Under the policy, Truck was charged with defending Surgin from lawsuits related to its patents.

"We are ecstatic," said Armand Maaskamp, co-owner of Surgin, a manufacturer of disposable surgical devices that employs 40 workers. "But we are ready to go through one more round of this. I don't think they'll give up."

Surgin's attorney, Daniel Callahan, said the small manufacturer had pleaded with Truck for legal assistance for more than 13 months before agreeing to a out-of-court settlement in 1991 with Alcon that forbade it from marketing a patented device used in cataract surgery. Callahan had argued that Surgin could have reaped more than $170 million had it been able to market the device.

Surgin also agreed in 1991 to drop a false advertising claim against Alcon, which countersued Surgin for patent infringement, Callahan said.

"We had (attorney's) bills that basically brought us to our knees," said Surgin co-owner, Ted Wortrich.

The trial was punctuated by testimony from a former vice president of Truck, Michael Conn, who said the company has a pattern of destroying or refusing to turn over documents requested by litigants.