Judgment May Affect First American Earnings
First American Financial Corp. Thursday said that a $7.7-million judgment entered by a Texas court Wednesday against its First American Title Insurance Co. subsidiary may result in a charge to 1986 earnings of $1.60 a share, or about $4 million, based on the current 2.5 million shares outstanding.
First American said it has made a claim for reimbursement of the award against its liability insurance company.
However, the judgment, if paid, would not have a “material effect” on the company, said a First American official. During 1985, the Santa Ana-based company had net earnings of $14 million.
The award stemmed from the alleged misuse by First American and another individual of computer software manufactured by the T. P. Walsh Co. of Houston. The lawsuit was originally filed in 1980. The other defendant, according to Bill Zaenglein Jr., First American’s secretary and counsel, is a former employee of T. P. Walsh.
Although an appeal is under consideration, Zaenglein said the company will first seek a reduction of the damages, which he termed “unwarranted.” An appeal, he said, “would depend on what happens with that motion.”