Raiders Sue Insurance Firm in Klein Case

The Raiders and owner Al Davis have filed suit against the National Union Insurance Co., accusing the company of bad-faith dealing during a lawsuit brought by Eugene Klein, former owner of the San Diego Chargers.

Davis and the Raiders claim that the insurance company said they were covered for damages and then, after the adverse verdict, said they weren’t covered.

The lawsuit asks that National Union be ordered to pay whatever the final judgment may be, after appeal, plus punitive damages, to be set by a jury, for the trouble the company caused Davis and the Raiders.

No dollar amount was mentioned in the Superior Court filing in Torrance this week. Last year, an appeals court reduced the verdict won by Klein from $10 million to $2 million. Further appeals are pending.

In 1984, Klein had sued Davis for malicious prosecution, claiming that Davis caused him to have a heart attack while testifying in the Raiders’ landmark antitrust suit against the National Football League.

Davis’ attorney in the new lawsuit, William M. Shernoff, an expert in bad-faith lawsuits against insurance companies, said that lawyers hired by National Union “encouraged the Raiders and Al Davis to go to trial in the Klein case on the basis that it was an unmeritorious lawsuit and that they would win it.”

Shernoff said Friday that Davis is irate at his insurer’s attitude in the case, especially since Klein had offered to settle the matter in 1986 and Davis was willing, but the insurer had no interest in a settlement, and the opportunity lapsed.