Santa Ana Firm Wins $2.8 Million in Insurance Suit

An Orange County jury has awarded more than $2.8 million to a Santa Ana computer products maker that claimed two insurers acted in bad faith in paying only a fraction of the company’s losses from a computer chip robbery.

Lifetime Memory Products Inc., which makes and markets computer memory chip boards, won more than $200,000 in actual damages and attorney fees and more than $2.6 million in punitive damages after a three-week trial in Orange County Superior Court.

The company, which lost nearly $142,000 in parts in 1995 when a gunman held up an employee on a delivery run, filed suit after receiving only $10,000 from insurers Century Indemnity Co. and Insurance Co. of North America.

“We had the total Cadillac package from our insurance companies,” said Paul Columbus, Lifetime’s owner. “Everything was covered.”

The insurance companies, which plan to appeal, contended that the stolen goods were personal property, which was insured for a maximum of $10,000 when lost off the premises. Lifetime argued, however, that the production parts were part of the company’s stock and inventory, which were insured for as much as $8 million. In addition, the insurers knew that Lifetime transported parts between suppliers and assemblers, the company contended.

The robbery occurred in August 1995 when a Lifetime driver stopped at a convenience store while hauling computer parts from a Santa Ana supplier to an Irvine subcontractor for assembly. A man held a gun to the driver’s face and stole about $182,000 worth of computer chips. The company recovered some parts a week later when police made an arrest, but products valued at $141,600 are still missing.

Columbus, the company’s owner, said he was pleased with the verdict but wasn’t counting the money yet. “I don’t start celebrating until I see the check,” he said.