State Pays $71 Million in Bay Area Quake Claims : Disaster: Hundreds of actions are settled out of court under special legislation, saving about $100 million. Only two cases will go to trial.

Under an innovative process, state officials have paid $71 million to settle hundreds of claims from the 1989 Loma Prieta earthquake without going to court, state Atty. Gen. Dan Lungren said Thursday.

By avoiding litigation in all but two cases, the state will end up paying over $100 million less than it potentially faced had the bulk of the claims gone to trial, Lungren said.

The attorney general and other state officials said that 412 claims, seeking $183 million in compensation, had been filed against the state in the collapse of the Cypress Freeway structure in Oakland that killed 42 persons and the fall of a deck section on the San Francisco-Oakland Bay Bridge that took one life.

In all, 335 claims have resulted in payment to victims and their families for death, injury and property loss, the officials said at a news conference. Seventy-five claims were rejected as fraudulent or not covered by law and two claimants chose to go to court rather than settle.

Payments ranged from $4.4 million for the death of a woman and injury to her child to $50 for damage to a car bumper. Survivors of a father of three obtained a $3.9-million settlement and a woman severely injured in the freeway collapse received $3.8 million.

The payments were made under a special law adopted by the Legislature shortly after the devastating quake to resolve claims without litigation. “The legislation made it possible for all sides to stay out of the courts, where bitter, costly and never-ending suits would have been the only avenue for victims and their families to receive compensation,” said Lungren.

In making the settlements, the state did not concede that it was at fault in the collapse of either the bridge section or the freeway structure. Darryl L. Doke, deputy state attorney general, the chief negotiator for the state, said there were “serious questions” over whether the state could be held liable in court for the disasters.

In months of negotiations with attorneys for the claimants, the state employed economists, claims adjusters, brokers and other experts to come up with settlement proposals. In the process, such factors as a victim’s age, earning power and needs of survivors were weighed. A retired judge was enlisted to resolve deadlocks but was used in fewer than 5% of the cases, the officials said.

Lungren rejected the suggestion that claimants were forced to settle to help save the state money, noting that victims and their families remained free to take the issue to court. “We negotiated in good faith on a no-fault basis,” the attorney general said. “. . . These were not lambs being led to the slaughter.”