P.M. BRIEFING : Paper Wins Insurance Dispute

PITTSBURGH —  An insurance company has reimbursed the Pittsburgh Post-Gazette $2 million of the largest libel judgment ever paid by a newspaper, leaving the paper’s publishing company to absorb $270,000 of the judgment.

“I can tell you that it’s a load off my back,” Post-Gazette Publisher William Block told the newspaper staff.

The newspaper reported today that PG Publishing Co. received the $2 million Tuesday from National Surety Corp., a subsidiary of Firemen’s Fund Insurance Cos. National Surety agreed to pay the amount in a settlement approved Tuesday.

PG Publishing had sued National Surety in May after the company refused to pay the libel claim under the newspaper’s excess-liability policy. National Surety argued that state law prohibits an insurer from paying punitive damages, which are intended to punish and to serve as a deterrent.

Richard DiSalle, a former judge, had sued the newspaper over a 1979 article about a disputed will he handled as a lawyer. The jury awarded DiSalle $200,000 in actual damages and $2 million in punitive damages. The award came to $2.77 million with the addition of $561,000 in interest.