EXXON RECOUPS $300 MILLION
INSURERS ORDERED TO PAY IN PARTIAL SETTLEMENT OF OIL-SPILL SUIT

By Daily News staff and wire services

ANCHORAGE- Exxon Corp. said Wednesday it will receive $300 million from Lloyds of London and about 250 other underwriters in a partial settlement of a lawsuit to recover expenses from the 1989 Exxon Valdez oil spill.

Exxon had sought more than $1 billion from its insurance companies and underwriting syndicates for the tanker accident and oil spill. The insurers refused to pay, saying the accident was caused by the company's negligence.

The Irving, Texas-based company still has $250 million in unresolved claims pending with Lloyds and other underwriters. An April 8 trial date has been set in state court in Harris County, Texas.

Exxon spent $3 billion to clean up the 11 million-gallon spill after the Valdez ran aground in Prince William Sound on March 24, 1989, and to settle lawsuits filed by the state and federal government.

Insurers contended the disaster was caused by Exxon's own misconduct -- making a known alcoholic the tanker's captain. Joseph Hazelwood was acquitted in 1990 of operating the tanker while drunk.

In the fall of 1994, Exxon was ordered to pay $5 billion in punitive damages to commercial fishermen, Alaska Natives, property owners and others harmed by the spill. It also was ordered to pay $287 million to fishermen for actual losses.

In that Anchorage trial, Exxon argued that the jury should not make it pay punitive damages because the company had learned its lesson and had been punished enough. Exxon attorneys didn't tell jurors the company was seeking reimbursement from insurers for its cleanup costs.

Since that 1994 trial, Exxon's insurers have sought access to some of the trial's sealed records.

''They wanted to get the medical records of a 'John Doe,' '' explained Steve Schroer, a Minneapolis attorney who represents the plaintiffs in the damage claim against Exxon. Some evidence was entered during trial about Hazelwood having a problem with alcohol. The court denied the insurance companies' requests. Schroer said he could not identify John Doe.

Also Wednesday, a $3.5 million settlement was announced between the oil company and thousands of people with claims from the spill.

The settlement clears the way for Exxon to appeal the $5 billion punitive award against it. Exxon was prevented from filing its appeal until all the claims were settled at the trial court level because they were all considered part of one large case, both sides said.

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