Court Erases Most of Firm’s Jury Award in Insurance Case

SANTA ANA — An Orange County judge wiped out nearly all of the $2.8 million a jury had awarded to a Santa Ana computer company that had sued an insurer for failing to pay losses in a computer chip robbery.

Superior Court Judge Floyd H. Schenk threw out $2.75 million in punitive damages and attorney fees that had been awarded to Lifetime Memory Products Inc., which claimed the insurers acted in bad faith in paying a fraction of the losses in the robbery.

Schenk found that the two carriers, affiliated with insurer Cigna group in Philadelphia, acted reasonably in limiting their payment on a $131,600 claim to only $10,000.

However, the judge upheld the basic compensatory damages of $131,600 against the carriers, Insurance Co. of North America and Century Indemnity Co.

The insurers are pleased with the judge’s decision and have not decided whether to appeal the verdict on the remaining amount, said their lawyer, Larry Arnold.

Lifetime, though, has told Arnold that it will appeal the Schenk’s decision. Lifetime lost nearly $142,000 in parts in 1995 when a gunman held up an employee on a delivery run. The insurance carriers contended that the stolen goods were personal property, which was insured to a maximum of $10,000.

The judge, who presided over the trial in February, filed his ruling last Friday, but lawyers weren’t notified until this week.