Wednesday, February 10, 1993
Orange County Edition
Section: Business
Page: D-6
Company Wins Judgment Against Insurer's 'Bad Faith'
By: JAMES S. GRANELLI
TIMES STAFF WRITER
A Placentia company that makes medical devices won a
default judgment Tuesday in a bad-faith case against its
insurance carrier, which had failed to defend the company
in a patent lawsuit.
Orange County Superior Court Judge C. Robert Jameson
issued the default judgment in favor of Surgin Surgical
Instrumentation Inc. after its carrier, Farmers Insurance
Group, refused to comply with a court order.
Jameson had previously ordered Farmers, as part of
pretrial proceedings, to turn over to Surgin its policy
and procedure manuals on handling insurance claims.
Surgin alleged that Farmers didn't follow its own
procedures before denying coverage to it in the patent
case.
After spending $270,000 in attorney fees, Surgin ran out
of money for its defense and settled the patent case,
giving up a 5% share of the market for a disposable
device used in cataract surgery, Surgin's lawyers said in
the bad-faith case.
Surgin, which is privately held, will now seek more than
$7 million in compensatory damages and will ask for more
than $62 million in punitive damages to deter Farmers
from acting in bad faith again, said Surgin's attorneys,
Daniel J. Callahan and Steven L. Dickinson of Irvine.
The lawyers said that punitive damages need to be more
than $62 million because Farmers was not deterred by a
$62-million jury verdict in July, 1991, in another
bad-faith case. Farmers will appeal the decision, said
Peter Lichtman, a lawyer for the group.
Descriptors: SURGIN SURGICAL INSTRUMENTATION INC; FARMERS
INSURANCE GROUP; INSURANCE INDUSTRY -- SUITS; BREACH OF
CONTRACT
Copyright (c) 1993 Times Mirror Company
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