EXXON WINS INSURANCE CASE
COMPANY DUE $250 MILLION FOR SPILL CLEANUP EXPENSES

By MIKE DRAGO
The Associated Press

HOUSTON- Jurors decided Monday that insurers should pay Exxon Corp. $250 million to compensate the oil company for money it spent to clean up after the 1989 Exxon Valdez spill in Alaska.

The jury voted 11-1 in determining that Lloyd's of London and some 250 other underwriters should make good on a policy that covered Exxon as owner of 11 million gallons of oil that spilled when the Exxon Valdez ran aground in Alaska's Prince William Sound.

The deliberations, which began late Thursday before adjourning for the weekend, only took about seven hours.

Irving-based Exxon claimed it had paid a $210 million premium for the insurance policy and deserved to recoup some of the $2.5 billion it claims to have spent cleaning up the spill.

The insurers argued that Exxon already collected $400 million under another policy held by subsidiary Exxon Shipping Co., which owned the Valdez.

Underwriters also alleged that Exxon was to blame for the accident because it knowingly left a captain with a history of alcohol problems, Joseph Hazelwood, at the ship's helm. Hazelwood was acquitted in 1990 of operating the tanker while drunk.

But the state court jurors rejected both arguments.

''We're just tickled to death,'' said J. Donald Bowen, Exxon's lead attorney. ''What it says is that people feel like a deal is a deal. If you pay your money and you get coverage for something and then something bad happens, you should be paid for your coverage.''

Harry Reasoner, the underwriters' lead attorney, promised an appeal and predicted the verdict ultimately will be overturned.

''I believe very strongly in the justice of our cause and I believe that we will eventually prevail in the Texas court system,'' he said.

Despite winning the case, Bowen predicted Exxon would not receive payment until insurers exhaust their appeals.

''You can count on it probably being three or four years,'' he said.

Still pending against the underwriters is Exxon's $500 million claim that insurers acted in bad faith in violation of the Texas Insurance Code. That case will be heard later by a separate jury.

Exxon originally sought more than $2 billion from its insurance companies and underwriting syndicates, but the insurers refused payment.

In January, the two sides announced a partial settlement in which the underwriters agreed to reimburse Exxon $300 million for certain expenses and liabilities.

Exxon, in addition to paying for the cleanup, was ordered to pay $5 billion in punitive damages to commercial fishermen, Native Alaskans, property owners and others harmed by the spill. A separate $287 million verdict was levied against Exxon to compensate fishermen.

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