VENTURA : Port District Loses Appeal of Judgment

The Ventura Port District has lost a court bid to force an insurance company to take responsibility for a multimillion-dollar judgment against the district.

The state Court of Appeal in Ventura ruled on Wednesday that Fireman’s Fund Insurance Co. was legally justified when it refused to defend the port district in a lawsuit brought by a former developer that went bankrupt while trying to build the Ventura Harbor Village.

The unanimous court ruled that the insurance policies the district held with Fireman’s applied to personal injury and property damage disputes, not the breach of contract that prompted the lawsuit by Ocean Services Corp.

The court also ruled that the district knew about the dispute with Ocean Services prior to being insured by Fireman’s in June, 1986, so the problem was not an unforeseeable emergency normally covered by insurance companies.

Ocean Services signed an agreement with the port district in 1979 to develop part of the harbor by building, among other things, an aquarium, a restaurant and retail facilities. At the time, the port district did not disclose that it had an agreement with another developer prohibiting the construction of retail facilities at the harbor, according to court documents.

Because of repeated assurances by a former harbor general manager that the problem could be resolved, Ocean Services officials went forward with the Harbor Village development. By the time Ocean Services went bankrupt in 1988, the company had incurred $13 million in net operating losses.

A jury awarded more than $31 million to Ocean Services in September, 1990, but the judgment was reduced to just under $17 million by the trial judge.

In May the appeals court upheld the judgment in favor of Ocean Services.