Lyon Files $7-Million Suit Against Insurance Broker

Orange County developer William Lyon on Wednesday filed a $7-million lawsuit against the insurance broker who sold him his personal liability policies, claiming that the New York company--Frank B. Hall Insurance Brokers Inc.--failed to inform him of various policy limitations.

Because of those limitations, the suit says, Lyon was held personally liable for $7 million in damages stemming from a 1986 fire at a Puerto Rico resort hotel in which he was a partner. Lyon is appealing the 1992 court decision that held him liable.

His suit, filed in Orange County Superior Court, seeks payment of the $7 million, plus costs, interest and punitive damages.