Pacific wins $24 million judgment.

More than 10 years after losing $50 million to a former executive who was ultimately convicted of money laundering, Pacific Enterprises received a $24 million award late last month in a lawsuit against its insurance firm.

Pacific, now a subsidiary of Sempra Energy, has been wrapped in a legal battle against Federal Insurance Co. since its claim for the losses was denied in 1994.

The latest development in the case follows several years of judicial actions beginning when a judge threw out the case in the late 1990s. A 9th Circuit Court of Appeals panel reversed the dismissal in September 2001, granting Pacific the right to go to trial. On Jan. 8, 2004, a jury returned a verdict of $12.3 million in favor of Pacific. In the recent decision, a federal judge doubled the award.

"Federal's failure to settle, while it may have been in good faith, resulted in the expenditure of these resources and continued delay," wrote U.S. District Court Judge Audrey Collins. "Based upon these factors, the court awards Pacific prejudgment interest from the date it filed its complaint (February 7, 1994)."

Pacific sued Federal in 1994 after it denied a claim for damages stemming from losses at FTM Sports Corp., a provider of sporting goods that was majority owned by Pacific subsidiary Thrifty Corp. The losses spanned a four-year period under FTM Sports President Robert Miller Jr., who was indicted in 1995 on charges of money laundering and bank fraud in connection with a $50 million loss to Thrifty. He was convicted on several dozen charges in 1996.

Pacific, which took a $13 million charge in its 1991 third-quarter earnings after discontinuing FTM Sports and restating its financial reports to shareholders, filed a claim for coverage of employee theft. Pacific had a $25 million insurance policy with a $500,000 deductible.

Federal alleges FTM Sports was not covered under the policy, court papers say. The firm also claims Pacific could not prove any "direct loss" occurred as a result of the theft, which is required under the insurance policy. Instead, Federal attributed the losses to regular business events, such as the subsidiary's failure to sell goods or make profits. Further, Federal argued, Thrifty was a participant in the money-laundering scheme, court documents say.

Calls to Federal, now a subsidiary of Chubb Corp. in Warren, N.J., were not returned. Federal's attorney, Michael Perlis, a partner at Shroock Shroock & Lavan LLP, did not return calls. Kirk Pasich, a partner at Pasich & Kornfeld LLP representing Pacific, said that Thrifty was never accused of any wrongdoing and that FTM was covered under the policy. "We did in fact lose the money," Pasich said.